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WPI inflation for July 2011 eases to 9.22%
Wholesale price-based inflation for July 2011 eased a bit to 9.22% from 9.44% in June
2011. Headline inflation has stubbornly remained above the 9% mark for eight
consecutive months now. However, the latest headline inflation print was in-line with the
median forecast (9.22%) of Bloomberg’s survey of economists. Core (non-food
manufacturing) inflation – which the RBI tracks closely – rose at a faster pace of 7.5% as
compared to 7.3% in June 2011. Inflation for May 2011 was revised upwards by 50bp to
9.56%.
Primary articles inflation eased off considerably to its lowest level in the last 21 months.
Driven by slower rise in food and non-food articles, primary articles inflation eased off to
11.3% from 12.2% in June 2011. However, inflation for minerals continued to be high at
25.0%. Fuel and power inflation also eased a bit, from 12.8% in June 2011 to 12.0%, on
the back of lower rise in mineral oil prices. Electricity inflation continued to show a negative
tick for the third straight month.
Manufactured products, which have a weightage of ~65% in overall WPI inflation,
continued to rise at an accelerated pace of 7.5%. Manufacturing articles inflation was
driven by textiles (12.9%), basic metals (10.1%) and chemicals (7.9%). The spread between
primary articles and manufactured products inflation, which was as high as 13.1% in
January 2011, narrowed considerably to 3.8% in July 2011 – indicating that bulk of
pass-through of raw-material cost pressures has already taken place, in our view.
Inflationary pressures are likely to ease in the coming months on falling global commodity
and energy prices due to sovereign debt crisis concerns in Eurozone countries, concerns of
double-dip recession in the US and expected overall slowdown in global growth.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
WPI inflation for July 2011 eases to 9.22%
Wholesale price-based inflation for July 2011 eased a bit to 9.22% from 9.44% in June
2011. Headline inflation has stubbornly remained above the 9% mark for eight
consecutive months now. However, the latest headline inflation print was in-line with the
median forecast (9.22%) of Bloomberg’s survey of economists. Core (non-food
manufacturing) inflation – which the RBI tracks closely – rose at a faster pace of 7.5% as
compared to 7.3% in June 2011. Inflation for May 2011 was revised upwards by 50bp to
9.56%.
Primary articles inflation eased off considerably to its lowest level in the last 21 months.
Driven by slower rise in food and non-food articles, primary articles inflation eased off to
11.3% from 12.2% in June 2011. However, inflation for minerals continued to be high at
25.0%. Fuel and power inflation also eased a bit, from 12.8% in June 2011 to 12.0%, on
the back of lower rise in mineral oil prices. Electricity inflation continued to show a negative
tick for the third straight month.
Manufactured products, which have a weightage of ~65% in overall WPI inflation,
continued to rise at an accelerated pace of 7.5%. Manufacturing articles inflation was
driven by textiles (12.9%), basic metals (10.1%) and chemicals (7.9%). The spread between
primary articles and manufactured products inflation, which was as high as 13.1% in
January 2011, narrowed considerably to 3.8% in July 2011 – indicating that bulk of
pass-through of raw-material cost pressures has already taken place, in our view.
Inflationary pressures are likely to ease in the coming months on falling global commodity
and energy prices due to sovereign debt crisis concerns in Eurozone countries, concerns of
double-dip recession in the US and expected overall slowdown in global growth.
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