Wholesale price index (WPI) remained negative for the 14th consecutive month at -0.73 per cent in December 2015.
This is also the fourth consecutive month in which the pace of WPI contraction has slowed over the previous month.
The slower pace of WPI contraction was mainly driven by the primary articles component, which came in at 5.5 per cent in December 2015 compared to 2.3 per cent in November. Of this, the food articles component was at 8.2 per cent and the non-food articles component at 7.7 per cent.
Primary articles Within primary articles, the price rise in the two components was offset by the ongoing double-digit contraction in mineral prices, which came in at -22.5 per cent in December 2015.
“We see a continuation of the deflationary trend, albeit at a slower pace. Prices of select food articles, however, continue to exhibit pressure on the upside and this needs continuous monitoring by the government. Raising agri-productivity and astute supply side management is the key to tackling the elevation in prices of food articles,” said A.Didar Singh, Secretary General, FICCI. The fuel and power segment of the WPI contracted by 9.15 per cent in December compared to a contraction of 11 per cent in the previous month, a reflection of the ongoing fall in global fuel prices. Global oil prices have fallen around 70 per cent in the last 15 months.
The contraction in the price of manufactured goods slowed marginally for the fourth consecutive month, coming in at -1.36 per cent in December compared to -1.42 in November. This also suggests that manufacturers do not have adequate pricing power due to poor demand.
The decelerating contraction of the WPI comes when the consumer price index for December quickened to 5.6 per cent, the fifth straight month of acceleration.
Published - January 15, 2016 12:36 am IST
