WPI inflation rises to 12-month high of (-) 0.73% in December 2015

Core inflation continues to remain flat at (-) 2%

The Wholesale Price Index (WPI)-based inflation moved up to a 12-month high of (-) 0.7% in December 2015, recording a rise for the fourth straight month from (-) 2% in November 2015 (-) 3.7% in October, (-) 4.6% in September and a record low level of (-) 5.1% touched in August 2015. An increase in WPI inflation in December 2015 was mainly driven by primary articles and fuel products. Further, the WPI inflation continued to be in the negative zone for the fourteenth straight month in December 2015.

As per the revised data, the inflation figure for October 2015 was slightly scaled up to (-) 3.7% from (-) 3.8% reported provisionally.

Inflation of primary articles increased to 5.5% from 2.3%, while that for fuel items moved up to (-) 9.2% in December 2015 from (-) 11.1% in November 2015. The inflation for manufactured products was flat at (-) 1.4% in December 2015.

As per major commodity group-wise, inflation moved up for food grains, vegetables, fruits, fish, poultry chicken, spices, raw cotton, oilseeds, flowers, crude petroleum, mineral oils, sugar, edible oils, textiles, machinery and tools, and non-metallic mineral products in December 2015. On the other hand, inflation declined for metallic mineral products, dairy products, beverages and tobacco products, and basic metals in December 2015.

Inflation of food items (food articles and food products) increased to 6.2% in December 2015 from 3.8% in November 2015. Meanwhile, inflation of non-food items (all commodities excluding food items) also moved up to (-) 3.7% in December 2015 from (-) 4.5% in November 2015.

Core inflation (manufactured products excluding foods products) continued to remain flat at (-) 2% in December 2015.

The contribution of primary articles to the overall inflation, at (-) 0.73%, was 151 basis points (bps) in December 2015 compared with 63 bps in November 2015. The contribution of manufactured products was (-) 76 bps compared with (-) 79 bps, while that of fuel product group was (-) 149 bps against (-) 183 bps in November 2015.

The contribution of food items (food articles and food products) to inflation increased to 184 bps in (-) 0.73% in December 2015 compared with 115 bps to (-) 1.99% in November 2015. Meanwhile, the contribution of non-food items (all commodities excluding food items) was (-) 256 bps in December 2015 compared with (-) 316 bps in November 2015.

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