Wholesale inflation slows to 5.09% in July as food articles get cheaper
The index for ‘Non-Food Articles’ group rose by 0.8 percent to 123.5 (provisional) from 122.5 (provisional) for the previous month due to higher price of floriculture (11%), guar seed (9%), castor seed (7%), raw cotton (5%), sunflower (4%), rape & mustard seed, raw jute, groundnut seed and raw rubber (3% each), coir fibre, mesta, linseed and gingelly seed (2% each) and cotton seed (1%).
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What is core inflation and why does it continues to be a problem?Wholesale inflation eased to 5.09% for the month of July on account of cheaper food articles, especially fruits and vegetables, as compared to 5.77% for the previous month and 1.88% during the corresponding month of the previous year, government data showed today.
Build up inflation rate in the financial year so far was 2.92% compared to a build up rate of 0.62% in the corresponding period of the previous year.
The index for ‘Food Articles’ group rose by 2.1 percent to 144.7 (provisional) from 141.7 (provisional) for the previous month due to higher price of peas/chawali (8%), fruits & vegetables (7%), gram (6%), bajra (3%), moong, egg, condiments & spices and fish-inland (2% each) and poultry chicken, wheat, tea, urad, paddy and milk (1% each). However, the price of betel leaves (16%), arhar (2%) and pork and barley (1% each) declined.
The index for ‘Non-Food Articles’ group rose by 0.8 percent to 123.5 (provisional) from 122.5 (provisional) for the previous month due to higher price of floriculture (11%), guar seed (9%), castor seed (7%), raw cotton (5%), sunflower (4%), rape & mustard seed, raw jute, groundnut seed and raw rubber (3% each), coir fibre, mesta, linseed and gingelly seed (2% each) and cotton seed (1%). However, the price of raw silk (11%), niger seed (7%), fodder (4%), safflower (kardi seed) (3%) and soyabean and copra (coconut) (2% each) declined.
The index for ‘Minerals’ group declined by 7.6 percent to 129.6 (provisional) from 140.2 (provisional) for the previous month due to lower price of copper concentrate (16%), manganese ore (7%), chromite (3%), iron ore, bauxite and limestone (2% each) and zinc concentrate (1%). However, the price of sillimanite (17%) and garnet (4%) moved up.
The index for ‘Crude Petroleum & Natural Gas’ group declined by 0.8 percent to 94.4 (provisional) from 95.2 (provisional) for the previous month due to lower price of crude petroleum (2%). However, the price of natural gas (1%) moved up.
Meanwhile, index for ‘Manufacture of Food Products’ group rose by 0.4 percent to 129.0 (provisional) from 128.5 (provisional) for the previous month due to higher price of gram powder (besan) (8%), maida, castor oil, sugar and mustard oil (4% each), sooji (rawa) (3%), gur, wheat flour (atta), manufacture of processed ready to eat food and manufacture of cocoa, chocolate & sugar confectionery (2% each) and cotton seed oil, basmati rice, groundnut oil, manufacture of macaroni, noodles, couscous & similar farinaceous products, processed tea, manufacture of prepared animal feeds, manufacture of bakery products, rice bran oil, vanaspati and manufacture of health supplements (1% each).
However, the price of molasses (21%), coffee powder with chicory, instant coffee and salt (3% each), powder milk, rice products, honey, palm oil and ice cream (2% each) and copra oil, rice [non-basmati], spices (including mixed spices), ghee, chicken/duck [dressed- fresh/frozen], butter, processing & preserving of fruit & vegetables and processing & preserving of fish, crustaceans & molluscs & products thereof (1% each) declined.
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Yesterday's government data on retail inflation, the key input for the Reserve Bank to review its monetary policy every two months, recorded a nine-month low print at 4.17 per cent on account of cheaper food articles.
