WPI inflation rebounds to 5.7% in March 2014

Inflation eases to 5.9% in FY2014 from 7.4% in FY2013

The Wholesale Price Index (WPI) based inflation rebounded from nine-months low of 4.68% in February 2014 to 5.7% in March 2014. The inflation also moved up in March 2014, while snapping consistent moderation in inflation rate for last three months. There was widespread contribution from most the sub-groups to increase in inflation rate during March 2014.

The inflation for primary articles rebounded from 6.3% in February 2014 to 7.7% in March 2014. The inflation for fuel and power group galloped to six-month high of 11.2% in March 2014 from 8.8% in February 2014, while the inflation for manufactured products also moved up to 3.2% in March 2014.

As per the major commodity group wise inflation, an increase in inflation for vegetables, fruits, milk, 'egg, meat & fish', oilseeds, flowers, crude petroleum, coal, mineral oils, sugar, edible oils, cigarette, basic metals etc contributed to the rise in inflation in March 2014. On the other hand, the inflation for spices, fibers, oil cakes, paper & paper products etc recorded decline in inflation in March 2014 from February 2014 level.

The inflation for food items (food articles and food products) increased from 5.6% in February 2014 to 7.1% in March 2014. Meanwhile, the inflation for non-food items (all commodities excluding food items) also moved up from 4.4% in February 2014 to 5.2% in March 2014. The core inflation (manufactured products excluding foods products) inched up to 12-monhts high of 3.5% in March 2014 from 3.2% in February 2014.

The contribution of primary articles to the overall inflation eased to 35.2% (at 202 bps to 5.7% inflation) in March 2014 from 35.4% (at 167 bps of 4.7%) in February 2014. The contribution of fuel product group increased to 32.8% (188 bps) in March 2014 from 31.6% (149 bps) in March 2014, while that of manufactured products declined to 31.9% (183 bps) in March 2014 from 33% (156 bps) in February 2014.

The contribution of food item (food articles and food products) to inflation increased to 34.3% (197 bps) in March 2014 from 32.9% (156 bps) in February 2014, while that of non-food items (all commodities excluding food items) eased to 65.6% (377 bps) in March 2014 from 67.3% (318 bps) in February 2014.

As per the revised data available, the inflation figure for January 2014 has been revised upwards to 5.17% from 5.05% reported earlier.

WPI Inflation in FY2014

The WPI inflation eased for third straight year to 5.9% in FY2014 from 7.4% in FY2013 and 9.6% in FY2011. However, the inflation has continued to remain above comfort for the fourth straight year. During FY2014, inflation for manufactured products eased to 2.9%, while that for fuel and power group was flat at 10.1%. Further, the inflation for primary articles was steady for third straight year close to double-digit level of 9.9% in FY2014.

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