Core inflation accelerates to 2.1% in December 2016
The Wholesale Price Index (WPI)-based inflation rose to 3.4% in December 2016 from 3.2% in November 2016, while snapping decline for last three straight months. An increase in WPI inflation was mainly driven by higher inflation for fuel and basic metals items, while inflation for food items declined sharply in December 2016.Inflation of primary articles dipped to 0.3% in December 2016 from 1.3% in November 2016. However, the inflation for manufactured products rose to 3.7% in December 2016. Further, the inflation for fuel items accelerated further to 8.7% in December 2016 from 7.1% in November 2016.
As per major commodity group-wise, inflation eased for food grains, fruits, vegetables, fish marine, poultry chicken, spices, fibres, flowers, sugar, tea & coffee products, textiles, wood products and leather products in December 2016. On the other hand, inflation of oilseeds, raw rubber, metallic minerals, crude petroleum, mineral oils, grain mill products, edible oils, beverages and tobacco products, rubber products, chemical products, basic metals, machinery and tools, and transport equipment rose in December 2016.
Inflation of food items (food articles and food products) eased to 2.8% in December 2016 from 4.4% in November 2016. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to 3.7% in December 2016 from 2.6% in November 2016.
Core inflation (manufactured products excluding foods products) accelerated to 2.1% in December 2016 from 1.5% in November 2016.
The contribution of primary articles to the overall inflation, at 3.15%, was 08 basis points (bps) in December 2016 compared with 36 bps in November 2016. The contribution of manufactured products was 206 bps compared with 179 bps, while that of fuel product group was 129 bps against 106 bps in November 2016.
The contribution of food items (food articles and food products) to inflation fell to 91 bps in 3.39% in December 2016 compared with 140 bps to 3.15% in November 2016. Meanwhile, the contribution of non-food items (all commodities excluding food items) was 250 bps in December 2016 compared with 179 bps in November 2016.
As per the revised data, the inflation figure for October 2016 was revised up to 3.8% compared with 3.4% reported provisionally.
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