WPI inflation rises to 0.79% in May driven by higher food prices

India’s main inflation gauge based on monthly wholesale price index (WPI) increased for the second straight month in May 2016 after witnessing 17 straight months of fall. The wholesale price index (WPI) for May rose to 0.79 per cent from 0.34 per cent in April, largely attributed by higher food prices. Food articles inflation came in at 7.88 percent in May compared to 4.23 per cent in April. Meanwhile, the buildup inflation rate in the financial year so far was 2.34 percent compared to a build up rate of 1.08 percent in the corresponding period of the previous year.

As per the data released by the government, the WPI for ‘All Commodities’ (Base: 2004-05=100) for the month of May, 2016 rose by 1.4 percent to 179.4 (provisional) from 177.0 (provisional) for the previous month. For the month of March, 2016, the final Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) stood at 175.3 as compared to 174.6 (provisional) and annual rate of inflation based on final index was revised to -0.45 percent as compared to -0.85 percent (provisional).

Component wise, inflation in primary articles having weight of 20.12 percent by 2.4 percent to 255.3 (provisional) from 249.3 (provisional) for the previous month. In the primary article index, the 'Food Articles' group rose by 2.8 percent to 271.1 (provisional) from 263.8 (provisional) for the previous month. 'Non-Food Articles' group rose by 0.4 percent to 226.4 (provisional) from 225.6 (provisional) for the previous month. The index for 'Minerals' group rose by 3.7 percent to 186.2 (provisional) from 179.5 (provisional) for the previous month. Fuel & Power index having weight of 14.91% rose by 2.8 percent to 180.3 (provisional) from 175.4 (provisional) for the previous month.

Manufactured Products constituting the major portion of the index with weightage of 64.97 percent rose by 0.5 percent to 155.7 (provisional) from 155.0 (provisional) for the previous month. Among the manufactured products, the index for 'Food Products' group rose by 1.0 percent to 185.3 (provisional) from 183.4 (provisional) for the previous month. The index for 'Beverages, Tobacco & Tobacco Products' group rose by 1.3 percent to 219.0 (provisional) from 216.2 (provisional) for the previous month. The index for 'Textiles' group rose by 0.5 percent to 140.6 (provisional) from 139.9 (provisional) for the previous month.

The index for 'Rubber & Plastic Products' group rose by 0.2 percent to 146.0 (provisional) from 145.7 (provisional) for the previous month. The index for 'Chemicals & Chemical Products' group rose by 0.1 percent to 150.1 (provisional) from 149.9 (provisional) for the previous month. The index for 'Basic Metals, Alloys & Metal Products' group rose by 0.6 percent to 154.9 (provisional) from 153.9 (provisional) for the previous month. The index for 'Machinery & Machine Tools' group rose by 0.4 percent to 135.5 (provisional) from 135.0 (provisional) for the previous month. The index for 'Transport, Equipment & Parts' group rose by 0.1 percent to 139.3 (provisional) from 139.1 (provisional) for the previous month.

However, the index for 'Wood & Wood Products' group declined by 0.5 percent to 197.0 (provisional) from 198.0 (provisional) for the previous month. The index for 'Non-Metallic Mineral Products' group declined by 0.3 percent to 178.7 (provisional) from 179.3 (provisional) for the previous month.