July 2014 WPI inflation declines to 5.19%
14082014
The WPI inflation for the month of July 2014 declined to 5.19% in July 2014 from 5.43% in June 2014. The decline in WPI inflation is attributed mainly to decline in the prices of fuel costs. The moderation in inflation despite the seasonal firming up of prices of fruits and vegetables is setting room for soft monetary policy stance. In view of the heavy dependence on monsoon for agriculture produce, it is necessary to facilitate farmers in the bad years by ensuring increased power supply, availability of fuel etc to farmers so that the sowing process is completed without delay. Further,ensuring credit availability to small & marginal farmers to adopt modern farm techniques and implementation of farm insurance schemes to take care of crop losses due to unforeseen natural calamities is necessary for increasing farm productivity in the coming times
Driven by the decrease in the prices of cereals, rice, vegetables, pulses, milk, egg, meat and fish, fuel and power, the WPI inflation declined to 5.19% (Y-O-Y) for the month of July 2014 as compared to 5.43% (Y-O-Y) for the month of June 2014. The Index for Wholesale Prices for the month of July 2014 rose by 1.1% to 184.6 from 182.6 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
| |||
May’14
|
June’14
|
July’14
| ||
1
|
All Commodities
|
6.18
|
5.43
|
5.19
|
2
|
Primary Articles
|
8.58
|
6.84
|
6.78
|
3
|
Food Articles
|
9.64
|
8.14
|
8.43
|
4
|
Cereals
|
7.81
|
5.33
|
4.46
|
5
|
Vegetables
|
0.08
|
(-) 5.89
|
(-) 1.27
|
6
|
Non-food Articles
|
4.94
|
3.49
|
3.32
|
7
|
Fuel & Power
|
10.53
|
9.04
|
7.40
|
8
|
Petrol
|
12.28
|
9.02
|
5.90
|
9
|
Manufactured Products
|
3.88
|
3.61
|
3.67
|
10
|
Sugar
|
(-) 0.89
|
(-) 2.09
|
0.89
|
11
|
Edible oils
|
(-) 0.82
|
(-) 0.75
|
0.35
|
12
|
Cement & Lime
|
(-) 3.93
|
(-) 4.45
|
(-) 5.24
|
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 (July 2014) stands at 2.38% as compared to a build up of 3.17% in the corresponding period of the previous year. Buildup in WPI inflation has declined due to fall in the prices of cereals, rice, vegetables, fuel and power etc.
Build up in inflation from March in select food commodities (%)
Manufacturing inflation stands at 3.67% (weight 64.97%)
The WPI inflation for manufactured products stands at 3.67% for the month of July 2014 as against 3.61% in June 2014. The index for this major group rose by 0.3% to 155.4 from 154.9 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 increases to 8.43% (Weight 14.34%)
Food inflation for the month of July 2014 has increased to 8.43% from 8.14% for the month of June 2014, on account of increase in the prices of wheat, pulses, potato, fruits, etc.
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 rose by 3.6% to 258.6 from 249.7 for the previous month due to higher price of fruits & vegetables (16%), maize (8%), condiments & spices and urad (6% each), jowar (5%), masur (4%), egg, arhar and tea (2% each) and pork, beef & buffalo meat, mutton, wheat, barley, bajra and ragi (1% each). However, the price of fish-inland (15%), gram and fish-marine (3% each), poultry chicken (2%) and moong (1%) have declined.
Non-food articles inflation declines to 3.32% (weight 4.26%)
The rate of inflation for non-food articles for the month of July 2014 stands at 3.32% as compared to 3.49% for the previous month. The index for Non-Food Articles group rose by 0.8% to 218.1 from 216.4 for the previous month due to higher price of guar seed and gingelly seed (sesamum) (7% each), copra (coconut) (4%), castor seed and niger seed (3% each) and rape & mustard seed, fodder, cotton seed and mesta (1% each). However, the price of raw jute (5%), raw rubber (4%) and raw silk, soyabean, sunflower and groundnut seed (1% each) have declined.
Fuel & power inflation declines to 7.40% (weight 14.91%)
The rate of inflation for fuel and power for the month of July 2014 stands at 7.40% as compared to 9.04% for the previous month. The index for this major group rose by 1.1% to 214.7 from 212.3 for the previous month due to higher price of petrol and furnace oil (3% each), bitumen and high speed diesel (2% each) and aviation turbine fuel (1%).
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