Feb 2014 WPI inflation eases to 4.7%

Driven by the decline in the prices of cereals, wheat, vegetables, egg, meat & fish and fuel & power the WPI inflation decreased to 4.68% (Y-O-Y) for the month of February 2014 as compared to 5.05% (Y-O-Y) for the month of January 2014. The Index for Wholesale Prices for the month of February and January 2014 stands at 178.9.

  Trend in WPI inflation since April 2011                                                                             (Y-O-Y %)

                                                     

Source: PHD Research Bureau, compiled from the office of the economic advisor to the Govt. of India

    WPI inflation in select commodities

Commodity		WPI Inflation Y-o-Y % growth
		Dec’13	Jan’14	Feb’14
1	All Commodities	6.40	5.05	4.68
2	Primary Articles	10.82	6.84	6.33
3	Food Articles	13.73	8.80	8.12
4	Cereals	10.09	9.27	9.08
5	Vegetables	56.78	16.60	3.99
6	Non-food Articles	6.00	4.40	5.13
7	Fuel & Power	10.87	10.03	8.75
8	Petrol	5.55	7.18	6.49
9	Manufactured Products	3.04	2.76	2.76
10	Sugar	(-)5.59	(‐)5.22	(-)6.62
11	Edible oils	(-)0.87	(‐)2.0	(-)1.68
12	Cement & Lime	(-)0.12	(‐)2.61	(‐)2.94

  Source: PHD Research Bureau, compiled from the office of the Economic Advisor to the Govt. of India

The build up in inflation in the financial year so far (February 2014) stands at 5.17% as compared to a build up of 6.15% in the corresponding period of the previous year. Buildup in WPI inflation has decreased due to decline in the prices of cereals, rice, wheat, potato, onion, egg, meat & fish, liquefied petroleum gas etc.

   Build up in inflation from March in select food commodities                          (%)

 Source: PHD Research Bureau, compiled from the office of the Economic Advisor, Govt. of India

Manufacturing inflation stands at 2.76% (weight 64.97%)

The WPI inflation for manufactured products stands at 2.76% for the month of February and January 2014. The index for this major group rose by 0.1% to 152.7 from 152.6 for the previous month.

    Trend in WPI inflation in manufactured products   (in %)

Source: PHD Research Bureau, compiled from the office of the Economic Advisor

Food inflation declines to 8.12% (Weight 14.34%)

Food inflation for the month of February 2014 has declined to 8.12% from 8.8% for the month of January 2014, on account of decrease in the prices of cereals, wheat, vegetables, potato, onion and egg, meat & fish.

  Pattern of food inflation                                   (Y-o-Y %)                                                             Food articles Index since Apr 2011  

    

Source: PHD Research Bureau, compiled from the office of the Economic Advisor, Govt. of India

The index for food articles group declined by 0.3% to 232.9 from 233.6 for the previous month due to lower price of poultry chicken (11%), egg (5%), gram and fruits & vegetables (3% each), maize and barley (2% each) and ragi, tea, bajra and arhar (1% each). However, the price of fish-inland (6%), jowar and moong (3% each), masur and urad (2% each) and milk, rice and mutton (1% each) moved up.

Non-food articles inflation increase to 5.13% (weight 4.26%)

The rate of inflation for non-food articles for the month of February 2014 stands at 5.13% as compared to 4.4% for the previous month. The index for non-food articles group rose by 0.6% to 217.4 from 216 for the previous month due to higher price of raw silk (10%), fodder (5%), copra (coconut) (4%), soyabean (3%), cotton seed (2%) and groundnut seed, flowers and raw cotton (1% each). However, the price of castor seed (5%), rape & mustard seed (4%), niger seed and raw rubber (3% each), sunflower, gingelly seed and safflower (2% each) and guar seed, coir fibre and linseed (1% each) declined.

Fuel & power inflation declines to 8.75% (weight 14.91%)

The rate of inflation for fuel and power for the month of February 2014 stands at 8.75% as compared to 10.03% for the previous month.The index for this major group decline by 0.1% to 212.6 from 212.8 for the previous month due to lower price of coking coal (7%), aviation turbine fuel, kerosene and electricity (agricultural) (2% each) and LPG (1%). However, petrol and high speed diesel (1% each) moved up.

Warm regards,

Dr. S P Sharma

Chief Economist