WPI inflation rises to 20-months high of 1.6% in June 2016

Core inflation rises slightly to (-) 0.3% in June 2016

The Wholesale Price Index (WPI)-based inflation galloped to 20-months high of 1.62% in June 2016. An increase in inflation was mainly driven surge in inflation for all three major sub-groups- primary articles, fuel & power and manufactured products in June 2016.

Inflation of primary articles increased to 5.5% in June 2016 from 4.6% in May 2016. The inflation for manufactured products accelerated to 1.2% in June 2016. Further, the inflation for fuel items jumped to (-) 3.6% in June 2016 from (-) 6.1% in May 2016.

As per major commodity group-wise, inflation increased for foodgrains, vegetables, fruits, milk, raw cotton, copper ore, iron ore, crude petroleum, mineral oils, sugar, grain mill products, oilcakes, beverages and tobacco products, paper products, chemical products, and gold & gold ornament in June 2016. On the other hand, inflation declined for egg, fish, spices, flowers, coal, tea & coffee products, rubber & plastic products, cement, marble, industrial machinery and electrical machinery in June 2016.

Inflation of food items (food articles and food products) rose to 8.2% in June 2016 from 7.8% in May 2016. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to (-) 1.3% in June 2016 from (-) 2.2% in May 2016.

Core inflation (manufactured products excluding foods products) rose to (-) 0.3% in June 2016, from (-) 0.4% in May 2016.

The contribution of primary articles to the overall inflation, at 1.62%, was 154 basis points (bps) in June 2016 compared with 125 bps in May 2016. The contribution of manufactured products was 65 bps compared with 51 bps, while that of fuel product group was (-) 58 bps against (-) 99 bps in May 2016.

The contribution of food items (food articles and food products) to inflation rose to 249 bps in 1.62% in June 2016 compared with 232 bps to 0.79% in May 2016. Meanwhile, the contribution of non-food items (all commodities excluding food items) was (-) 89 bps in June 2016 compared with (-) 154 bps in May 2016.

As per the revised data, the inflation figure for April 2016 was revised up to 0.79% compared with 0.34% reported provisionally.

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