WPI inflation inches up to (-) 2.4% in May 2015

Core inflation declines to (-) 0.6% in May 2015 from (-) 0.5% in June 2015

The Wholesale Price Index (WPI) based inflation inched up slightly to (-) 2.4% in May 2015 compared with (-) 2.65% in April 2015. Inflation for March 2015 has been retained unchanged at (-) 2.33%. However, the WPI inflation remained in the negative zone for the seventh straight month in May 2015.

Inflation declined for primary articles and manufactured products, but an increase inflation for fuel items mainly contributed to the entire rise in overall inflation in May 2015. Inflation of manufactured products declined to (-) 0.6% in May 2015 from (-) 0.5% in April 2015. Inflation of primary articles fell from (-) 0.3% in April 2015 to 0.8% in May 2015. Fuel products inflation increased to (-) 10.5% in May 2015 from (-) 13.0% in April 2015.

As per major commodity group-wise, inflation of foodgrains, fibers, oilseeds, sugarcane, fodder, flowers, crude petroleum, mineral oil, electricity, edible oils, oil cakes, tea, wood products, leather products, rubber & plastic products, and chemical products increased, contributing to the rise in inflation in May 2015.

On the other hand, inflation of fruits, vegetables, milk, fish, chicken, spices, iron ore, grain mill products, beverages, textiles, non-metallic mineral products, basic metals, machinery and machine tools declined, restricting the overall rise in inflation in May 2015.

Inflation of food items (food articles and food products) eased to 2.3% in May 2015 from 3.5% in April 2015. Meanwhile, inflation of non-food items (all commodities excluding food items) rose to (-) 4.3% in May 2015 from (-) 5.1% in April 2015.

Core inflation (manufactured products excluding foods products) declined to (-) 0.6% in May 2015 from (-) 0.5% in April 2015.

The contribution of primary articles to the overall inflation, at (-) 2.36%, declined to (-) 21 basis points, or bps, in May 2015 from (-) 07 bps to (-) 2.65% in April 2015. The contribution of manufactured products declined to (-) 36 bps from (-) 29 bps, while that of fuel product group increased to (-) 183 bps) from (-) 228 bps.

The contribution of food items (food articles and food products) to inflation eased to 67 bps to (-) 2.33% from 99 bps to (-) 2.65% in April 2015. Meanwhile, the contribution of non-food items (all commodities excluding food items) increased to (-) 305 bps in May 2015 compared with (-) 353 bps in April 2015.

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