Oct WPI inflation grows at 7%

Driven by increase in the prices of wheat, fruits, egg, meat & fish, fibres, the WPI inflation increased to 7% (Y-O-Y) for the month of October 2013 as compared to 6.5% (Y-O-Y) for the month of September 2013. The Index for Wholesale Prices for the month of October 2013 rose by 0.3% to 180.3 from 179.7 for the previous month.

  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
		Aug’13	Sept’13	Oct’13
1	All Commodities	6.99	6.46	7.00
2	Primary Articles	13.57	13.54	14.68
3	Food Articles	19.17	18.40	18.19
4	Cereals	15.57	13.05	12.00
5	Vegetables	80.96	89.37	78.38
6	Non-food Articles	1.21	5.17	6.79
7	Fuel & Power	12.66	10.08	10.33
8	Petrol	3.29	9.64	5.27
9	Manufactured Products	2.31	2.03	2.50
10	Sugar	(-)4.75	(-)7.49	(-)8.50
11	Edible oils	(-)2.86	(-)2.58	(-)0.74
12	Cement & Lime	(-)1.98	(-)3.16	(-)3.23

 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 (October 2013) stands at 6% as compared to a build up of 4.66% in the corresponding period of the previous year. Buildup in WPI inflation has increased due to rise in the prices of vegetables, onion, fruits, milk, egg, meat & fish, fibers, cotton textiles, leather & leather products and rubber & plastic products 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 rises to 2.5% (weight 64.97%)

The WPI inflation for manufactured products rises to 2.50% vis-à-vis 2.03% in the month of September 2013. The index for this major group rose by 0.4% to 151.6 from 151.0 for the previous month. 

 Trend in WPI inflation in manufactured products                                                                          (%)                                                               

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

Food inflation declines to 18.19% (Weight 14.34%)

Food inflation for the month of October 2013 has decreased to 18.19% as against 18.40% for the month of September 2013, on account of decrease in the prices of cereals, rice, onion, vegetables and milk.

  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 0.4% to 251.4 from 252.3 for the previous month due to lower price of ragi and maize (5% each), tea (4%) and poultry chicken, fruits & vegetables and fish-marine (3% each). However, the price of fish-inland (8%), moong (5%), coffee (3%), condiments & spices, egg, wheat, urad and pork (2% each) and rice, mutton, beef & buffalo meat, barley and arhar (1% each) moved up.

Non-food articles inflation rises to 6.79% (weight 4.26%)

The rate of inflation for non-food articles for the month of October 2013 stands at 6.79% as compared to 5.17% for the previous month. The index for non-food articles group declined by 0.7% to 212.3 from 213.7 for the previous month due to lower price of guar seed (16%), logs & timber (13%), raw rubber (11%), sunflower (4%), raw cotton (3%), castor seed (2%) and soyabean, gingelly seed and linseed (1% each). However, the price of copra (coconut) (12%), raw jute (6%), groundnut seed (5%), niger seed (2%) and coir fibre (1%) moved up.

Fuel & power inflation rises to 10.33% (weight 14.91%)

The rate of inflation for fuel and power for the month of October 2013 stands at 10.33% as compared to 10.08% for the previous month. The index for this major group rose by 0.9% to 209.4 from 207.5 for the previous month due to higher price of electricity (agricultural) (13%), electricity (industry) (10%), electricity (domestic) (5%), electricity (commercial) and electricity (railway traction) (4% each), aviation turbine fuel (3%) and bitumen, lubricants and kerosene (1% each). However, the price of petrol (4%) and furnace oil (3%) declined.

Warm regards,

Dr. S P Sharma

Chief Economist