WPI inflation eases to seven-month low of 2.5% in February 2018

Core WPI inflation accelerates to 3.9% in February 2018

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, eased further down to a seven-month low of 2.5% in February 2018, while exhibiting a decline for the third straight month from 2.8% in January 2018. Among the three major components of the WPI index, the inflation for primary articles dipped sharply, while fuel & power group inflation also eased contributing to the decline in overall inflation in February 2018. However, the inflation for manufactured products group moved up in February 2018. Core inflation (manufactured products excluding foods products) accelerated to 42-months high of 3.9% in February 2018 from 3.4% in January 2018.

Inflation of primary articles dipped to 0.8% in February 2018 from 2.4% in January 2018, while the inflation for fuel items eased to 3.8% in February 2018 from 4.1% in January 2018. However, the inflation for manufactured products rose to 3.0% from 2.8%.

As per major commodity group-wise, inflation declined for cereals, vegetables, fruits, fish, chicken, fibres, raw rubber, floriculture, coal, mineral oils, food products, beverages, paper products, pharma products, rubber & plastic products, fabricated metal products, electrical equipment and furniture in February 2018. On the other hand, inflation of pulses, spices, oilseeds, metallic minerals, crude petroleum, non-coking coal, electricity, tobacco products, wearing apparel, leather products, chemical products, other non-metallic mineral products, basic metals, machinery & equipment, jewellery products and motor vehicles increased in February 2018.

Inflation of food items (food articles and food products) declined to 0.1% in February 2018 from 1.7% in January 2018 level. Meanwhile, inflation of non-food items (all commodities excluding food items) increased to 3.6% in February 2018 from 3.3% in January 2018.

The contribution of primary articles to the overall inflation of 2.5% stood at 20 basis points (bps) in February 2018, showing decline from 60 bps to 2.8% in January 2018. The contribution of fuel product group eased to 42 bps against 44 bps in January 2018, while that of manufactured products increased to 193 bps compared with 177 bps in the previous month.

The contribution of food items (food articles and food products) to inflation dipped to 02 bps to 2.5% in February 2018 compared with 48 bps to 2.8% in January 2018. Meanwhile, the contribution of non-food items (all commodities excluding food items) rose to 253 bps in February 2018 compared with 231 bps in January 2018.

The WPI inflation stood at 2.9% in April-February FY2018 against 1.4% in April-February FY2017. The primary articles inflation eased to 1.4% in April-February FY2018 from 3.4% in April-February FY2017, while fuel products inflation increased to 8.4% from (-) 2.1%. The inflation for manufactured products jumped to 2.7% in April-February FY2018 from 1.2% in April-February FY2017.

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