WPI inflation data at -1.99% in November vs -3.81% in October

Easing the deflationary trend but still remaining in the negative territory for thirteen month in a row, India’s main inflation gauge, based on monthly wholesale price index (WPI), stood at -1.99 percent in November the highest level since January, compared to -3.81 percent in October and versus a forecast of -2.59 percent, on account of higher prices of pulses and onion. Meanwhile, build up inflation rate in the financial year so far was 0.85% compared to a build up rate of 0.50% in the corresponding period of the previous year.

As per the government data, the Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) for the month of November, 2015 rose by 0.5 percent to 177.6 (provisional) from 176.7 (provisional) for the previous month. WPI inflation has been in the negative zone since November 2014. 

Component wise, inflation in primary articles, having weight of 20.12% rose by 1.6 percent to 256.5 (provisional) from 252.4 (provisional) for the previous month. In primary articles the index for ‘Food Articles’ group rose by 2.3 percent to 271.0 (provisional) from 264.9 (provisional) for the previous month. The index for ‘Non-Food Articles’ group rose by 0.5 percent to 221.7 (provisional) from 220.7 (provisional) for the previous month. However, the index for ‘Minerals’ group declined by 2.2 percent to 217.6 (provisional) from 222.5 (provisional) for the previous month. Fuel & Power index having weight of 14.91%, rose by 0.9 percent to 177.9 (provisional) from 176.4  (provisional) for the previous month due to higher price of high speed diesel (3%) and kerosene and furnace oil (1% each).  However, the price of bitumen and aviation turbine fuel (1% each) declined.

The index of manufactured products which contributes to majority 64.97% of the overall index weight, declined by 0.2 percent to 153.0 (provisional) from 153.3 (provisional) for the previous month. Among the manufactured products, the index for ‘Food Products’ group rose by 0.3 percent to 174.9 (provisional) from 174.3 (provisional) for the previous month. The index for ‘Textiles’ group rose by 0.3 percent to 139.8 (provisional) from 139.4 (provisional) for the previous month. The index for ‘Wood & Wood Products’ group rose by 1.7 percent to 197.7 (provisional) from 194.4 (provisional) for the previous month. The index for ‘Transport, Equipment & Parts’ group rose by 0.1 percent to 137.9 (provisional) from 137.7 (provisional) for the previous month.

On the other hand, The index for ‘Beverages, Tobacco & Tobacco Products’ group declined by 0.1 percent to 206.0 (provisional) from 206.2 (provisional) for the previous month. The index for ‘Paper & Paper Products’ group declined by 0.4 percent to 154.6 (provisional) from 155.2 (provisional) for the previous month. The index for ‘Leather & Leather Products’ group declined by 1.0 percent to 143.8 (provisional) from 145.3 (provisional) for the previous month. The index for ‘Rubber & Plastic Products’ group declined by 0.5 percent to 146.3 (provisional) from 147.0 (provisional) for the previous month. The index for ‘Chemicals & Chemical Products’ group declined by 0.1 percent to 150.6 (provisional) from 150.8 (provisional) for the previous month. The index for ‘Non-Metallic Mineral Products’ group declined by 0.7 percent to 176.9 (provisional) from 178.1 (provisional) for the previous month. The index for ‘Basic Metals, Alloys & Metal Products’ group declined by 1.2 percent to 152.2 (provisional) from 154.1 (provisional) for the previous month.

Meanwhile, for the month of September, 2015, the final Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) stood at 176.5 as compared to 176.6 (provisional) and annual rate of inflation based on final index stood at -4.59 percent as compared to -4.54 percent (provisional) respectively.

The easing was largely because of the base effect and added that the inflation print continues to paint a worrying picture of weakness led by the global commodity rout.