WPI Inflation steady at 1.1% in August 2019

Core WPI inflation turns negative at (-) 0.5% in August 2019

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, remain flat at 1.1% in August 2019, after moderating to a 25-month low of 1.1% in July 2019. Among the three major sub-groups, the inflation for primary articles increased snapping decline for last three months, while inflation for fuel and power and manufactured products groups have further declined contributing to the fall in overall WPI inflation in August 2019. The core inflation (manufactured products excluding foods products) slipped into sub-zero level after 33-months to (-) 0.5% in August 2019.

The WPI inflation is kept unchanged at 2.0% for June 2019 similar to 2.0% reported to at provisional level.

As per major commodity group-wise, inflation dipped for basic metals, textiles, motor vehicles, trailers and semi-trailers, chemicals and chemical products, mineral oils, computer, electronic and optical products, fabricated metal products, except machinery and equipment, machinery and equipment, fibres, pulses, rubber and plastics products etc. On the other hand, inflation of eggs, meat & fish, other manufacturing, fruits, food products, vegetables, milk, floriculture, metallic minerals, condiments & spices, other transport equipment, furniture etc increased in August 2019.

Inflation of primary articles increased to 6.4% in August 2019 from 5.0% in July 2019. The inflation for fuel and power group inflation dipped further below sub-zero level to (-) 4.0% and the manufactured products inflation also dipped further to 0.0% in August 2019.

Inflation of food items (food articles and food products) increased to 5.8% in August 2019 from 4.5% in July 2019 level. Meanwhile, inflation of non-food items (all commodities excluding food items) dipped to (-) 0.7% in August 2019 from (-) 0.2% in July 2019.

The contribution of primary articles to the overall inflation of 1.08% increased to 164 basis points (bps) in August 2019, from contribution of 128 bps to 1.08% in July 2019. The contribution of fuel product group further declined to (-) 46 bps against (-) 42 bps in July 2019, while that of manufactured products eased to 0 bps in August 2019 from 21 bps in July 2019.

The contribution of food items (food articles and food products) to inflation increased to 162 bps to 1.08% in August 2019 compared with 128 bps to 1.08% in July 2019. Meanwhile, the contribution of non-food items (all commodities excluding food items) dipped to (-) 50 bps in August 2019 from (-) 16 bps in July 2019.

The WPI inflation fell to 2.0% in April-August FY2020 against 4.8% in April-August FY2019. The primary articles inflation moved up to 6.2% in April-August FY2020 from 2.6% in April-August FY2019, while fuel products inflation tumbled to (-) 0.9% from 14.5%. The inflation for manufactured products dipped to 0.9% in April-August FY2020 from 4.0% in April-August FY2019.

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