WPI inflation rises to 19-months high of 0.79% in May 2016

Inflation figure for March 2016 revised upwards to (-) 0.45%

The Wholesale Price Index (WPI)-based inflation accelerated to 19-months high of 0.79% in May 2016. The WPI inflation had entered into positive zone at 0.34% in April 2016 after 17-months of consistent deflation. An increase in inflation was mainly driven surge in inflation for primary articles and manufactured products, while inflation for fuel products moderated in May 2016.

Inflation of primary articles increased to 4.5% in May 2016 from 2.3% in April 2016. After 12 months of deflation, the inflation for manufactured products turned positive to 0.1% in March 2016 and accelerated to 0.9% in May 2016. However, the inflation for fuel items declined to (-) 6.1% from (-) 4.8%.

As per major commodity group-wise, inflation increased for foodgrains, vegetables, fruits, egg, fish, spices, sugar, iron ore, steel products, non-metallic mineral products, and machinery & machine tools in May 2016. On the other hand, inflation declined for milk, fish-marine, oilseeds, flowers, raw rubber, fodder, crude petroleum, mineral oils, edible oils, oilcakes, tea, wood & products, leather products in May 2016.

Inflation of food items (food articles and food products) rose to 7.8% in May 2016 from 5.4% in April 2016. Meanwhile, inflation of non-food items (all commodities excluding food items) declined to (-) 2.2% in May 2016 from (-) 1.9% in April 2016.

Core inflation (manufactured products excluding foods products) rose to (-) 0.4% in May 2016, from (-) 0.8% in April 2016.

The contribution of primary articles to the overall inflation, at 0.79%, was 125 basis points (bps) in May 2016 compared with 65 bps in April 2016. The contribution of manufactured products was 51 bps compared with 41 bps, while that of fuel product group was (-) 99 bps against (-) 75 bps in April 2016.

The contribution of food items (food articles and food products) to inflation rose to 232 bps in 0.79% in May 2016 compared with 164 bps to 0.34% in April 2016. Meanwhile, the contribution of non-food items (all commodities excluding food items) was (-) 154 bps in May 2016 compared with (-) 132 bps in April 2016.

As per the revised data, the inflation figure for March 2016 was revised up to (-) 0.45% compared with (-) 0.85% reported provisionally.

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