WPI inflation flat at (-) 0.85% in March 2016

WPI inflation dips to (-) 2.5% in FY2016 from 2% in FY2015

The Wholesale Price Index (WPI)-based inflation was flat at (-) 0.85% in March 2016 from February 2016, while the inflation figure continued to be in the negative zone for the seventeenth straight month. The inflation for primary articles as well as manufactured products has increased, while the inflation for fuel products declined helping to maintain inflation rate nearly steady in March 2016

As per the revised data, the inflation figure for January 2016 was revised down to (-) 1.1% compared with (-) 0.9% reported provisionally.

Inflation of primary articles rebounded to 2.1% in March 2016 from 1.6% in February 2016, while snapping rise for last two months. The inflation for manufactured products also rose to (-) 0.1% in March 2016 from (-) 0.6% in February 2016. However, the inflation for fuel items declined to (-) 8.3% from (-) 6.4%

As per major commodity group-wise, inflation declined for fruits, spices, raw cotton, raw silk, oilseeds, crude petroleum, mineral oils, electricity, oilcakes, tea, paper & products, chemicals and products, and non-metallic mineral products in March 2016. On the other hand, inflation increased for basic metals, transport equipment & parts, textiles item, beverages, sugar, sugarcane, raw rubber, milk, vegetables, and food grains in March 2016.

Inflation of food items (food articles and food products) rose to 4% in March 2016 from 3.7% in February 2016. Meanwhile, inflation of non-food items (all commodities excluding food items) was flat at (-) 2.9% in March 2016 from in February 2016.

Core inflation (manufactured products excluding foods products) increased to (-) 1.1% in March 2016, from 1.7% in February 2016.

The contribution of primary articles to the overall inflation, at (-) 0.85%, was 58 basis points (bps) in March 2016 compared with 44 bps in February 2016. The contribution of manufactured products was (-) 07 bps compared with (-) 33 bps, while that of fuel product group was (-) 132 bps against (-) 98 bps in February 2016.

The contribution of food items (food articles and food products) to inflation rose to 119 bps in (-) 0.85% in March 2016 compared with 111 bps to (-) 0.91% in February 2016. Meanwhile, the contribution of non-food items (all commodities excluding food items) was (-) 200 bps in March 2016 compared with (-) 204 bps in February 2016.

The WPI inflation turned negative at (-) 2.5% in the financial year ended March 2016 (FY2016) from 2.0% in FY2015. The inflation for primary articles eased to 0.1% in FY2016 from 0.8% in FY2015. The inflation for fuel products dipped deeper to (-) 2% from (-) 0.2%, while that for manufactured products also plunged to (-) 0.6% from 1.3%.

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