WPI inflation falls for 14th straight month in December to -0.73 per cent

Wholesale Price Index (WPI) inflation extending its deflationary trend for fourteenth straight month, declined by -0.73 percent in the month of December as against - 1.99 per cent in last month, as food articles, mainly vegetables, turned costlier and by tumbling oil prices. Build up inflation rate in the financial year so far was 0.74% compared to a build up rate of -0.89% in the corresponding period of the previous year. Also, October WPI inflation has now been revised to (-) 3.7 per cent from (-) 3.81 per cent.

As per government data, the Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) for the month of December, 2015 declined by 0.1 percent to 177.4 (provisional) from 177.6 (provisional) for the previous month. The reading which has been in the negative zone since November last year was mainly on the back of higher prices of onions, vegetables and pulses.

Component wise, inflation in primary articles, having weight of 20.12%, rose by 0.5 percent to 257.8 (provisional) from 256.5 (provisional) for the previous month. In the primary article index, the index for 'Food Articles' group rose by 0.6 percent to 272.7 (provisional) from 271.0 (provisional) for the previous month. The index for ‘Non-Food Articles’ group rose by 1.0 percent to 223.9 (provisional) from 221.7 (provisional) for the previous month. However, the index for ‘Minerals’ group declined by 2.4 percent to  212.3 (provisional) from 217.6  (provisional) for the previous month.

Fuel & Power index having weight of 14.91%, declined by 0.6 percent to 176.8 (provisional) from 177.9 (provisional) for the previous month.

Manufactured Products constituting the major portion of the index with weightage of 64.97%, declined by 0.3 percent to 152.6 (provisional) from 153.0 (provisional) for the previous month. Among the manufactured products, the index for 'Food Products' group  rose by 0.3 percent to 175.4 (provisional) from 174.9 (provisional) for the previous month. The index for ‘Paper & Paper Products’ group rose by 0.2 percent to 154.9 (provisional) from 154.6 (provisional) for the previous month. The index for ‘Non-Metallic Mineral Products’ group rose by 0.3 percent to 177.5 (provisional) from 176.9 (provisional) for the previous month. The index for ‘Transport, Equipment & Parts’ group rose by 0.1 percent to 138.0 (provisional) from 137.9 (provisional) for the previous month. The index for ‘Leather & Leather Products’ group rose by 0.4 percent to 144.4 (provisional) from 143.8 (provisional) for the previous month.

On the other side, the index for ‘Beverages, Tobacco & Tobacco Products’ group declined by 0.4 percent to 205.2 (provisional) from 206.0 (provisional) for the previous month. The index for ‘Textiles’ group declined by 0.1 percent to 139.7 (provisional) from 139.8 (provisional) for the previous month. The index for ‘Wood & Wood Products’ group declined by 0.7 percent to 196.4 (provisional) from 197.7 (provisional) for the previous month. The index for ‘Rubber & Plastic Products’ group declined by 0.3 percent to 145.8 (provisional) from 146.3 (provisional) for the previous month. The index for ‘Chemicals & Chemical Products’ group declined by 0.5 percent to 149.9 (provisional) from 150.6 (provisional) for the previous month. The index for ‘Basic Metals, Alloys & Metal Products’ group declined by 1.2 percent to 150.3 (provisional) from 152.2 (provisional) for the previous month.

The final Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) stood at 176.9 as compared to 176.7 (provisional) and annual rate of inflation based on final index stood at -3.70 percent as compared to  -3.81 percent (provisional) respectively

The trends represent softening of international prices. However, part of this might be due to slow demand in domestic markets, which might come in the way of revival of economic growth.