Core inflation rises to 3% in January 2014
The Wholesale Price Index (WPI) based inflation dipped sharply to eight-month low of 5.05% in January 2014 from 6.16% in December 2013, mainly driven up by decline in vegetables and mineral oil inflation. The inflation for primary articles dipped from 34-months high of 15.9% in November 2013 to 10.8% in December 2013 and further declined 6.8% in January 2014. The inflation for fuel and power group also eased to 10% in January 2014, while the inflation for manufactured products increased to 2.8% in January 2014.As per the major commodity group wise inflation, the decline in inflation for foodgrains, vegetables, fruits, oilseeds, flowers, crude petroleum, mineral oils, cement etc helped the inflation to ease in January 2014. On the other hand, the inflation for milk, fibers, textiles and basic metals increased in January 2014 from December 2013 level.
The inflation for food items (food articles and food products) eased from 9.5% in December 2013 to 6.2% in January 2014. Meanwhile, the inflation for non-food items (all commodities excluding food items) also eased from 4.9% in December 2013 to 4.6% in January 2014. The core inflation (manufactured products excluding foods products) inched up to 3% in January 2014 from 2.7% in December 2013.
The contribution of primary articles to the overall inflation dipped from 45.8% (at 282 bps to 6.16% inflation) in December 2013 to 35.6% (at 181 bps of 5.05%) in December 2013. The contribution of fuel product group increased to 33.5% (170 bps) in January 2014 from 29.9% (185 bps) in December 2013, while that of manufactured products also increased to 30.9% (156 bps) from 24.3% (150 bps) in December 2013. The contribution of food item (food articles and food products) dipped to 34.3% (174 bps) in January 2014 from 42.6% (263 bps) in December 2013, while that of non-food items (all commodities excluding food items) increased to 66% (335 bps) in January 2014 from 57% (352 bps) in December 2013.
The inflation figure for November 2013 has been kept unchanged at 7.52%, while that for December 2013 has been also retained unchanged at 6.16%.
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