WPI inflation falls to a 20-month low of -0.1% in June
India's wholesale inflation fell to a 20-month low of -0.1% year-on-year in June from 0.4% in May due to decline in food and fuel prices and a moderation in manufactured goods costs, official data released Monday showed.
Economists anticipate Wholesale Price Index (WPI) inflation to remain in negative territory in July, given the ongoing year-on-year deflation in food and crude oil prices.
'Negative rate of inflation in June 2025 is primarily due to decrease in prices of food articles, mineral oils, manufacture of basic metals, crude petroleum & natural gas etc,' said the commerce ministry in a statement.On a quarterly basis, average wholesale inflation dropped to a five-quarter low of 0.4% in Q1FY26.
'With the WPI inflation averaging at just 0.4% in Q1FY26 vis-à-vis 2.4% in Q4FY25, we expect the nominal GDP growth to decelerate quite sharply between these quarters,' said Rahul Agrawal, senior economist at ICRA.
Official gross domestic product (GDP) data for the June quarter will be released in August.Paras Jasrai, associate director at India Ratings and Research (Ind-Ra), said, 'The muted input price growth in the economy would provide support to the corporates in maintaining their margins at a time when industrial output growth has faced deceleration on account of weather vagaries.'Ind-Ra expects wholesale inflation to stay below 0.5% in Q2FY26, amid muted inflation in food and core items.Food inflation, which accounts for around one-fourth of the WPI weight, fell to a two-year low of -0.3% in June from 1.7% in May.Major contributors to food deflation included onion (-33.5%), potato (-32.7%), vegetables (-22.7%), and pulses (-14.1%). Fruit prices eased to 1.6% year-on-year in June compared to 10.2% in May.'The drop in prices of pulses was due to a robust kharif output,' said Jasrai.Inflation in manufactured products, which account for 64.23% weight in the WPI, eased slightly to 1.97% in June from 2.04% in May. Within this category, vegetable & animal oils and fats recorded the highest inflation at 23.1%, followed by food products (7%), and tobacco products (2.8%).Inflation in primary articles and fuel & power contracted by 3.4% and 2.7%, respectively.'The fuel & power and crude petroleum and natural gas prices declined during June due to benign global commodity prices,' said Jasrai.
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