- By PTI
- Mon, 15 Sep 2025 05:01 PM (IST)
- Source:JND
WPI Inflation: Wholesale price inflation rose to a four-month high of 0.52 per cent in August as prices of food articles and manufactured items inched up, even though fuel and power basket witnessed easing.
Reversing the deflationary trend of the past two months, (-) 0.58 in July and (-) 0.19 per cent in June, the Wholesale Price Index (WPI)-based inflation rose to its highest level since April, when it was 0.85 per cent.
Wholesale price inflation was 1.25 per cent in August last year.
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"Positive rate of inflation in August 2025 is primarily due to an increase in prices of food products, manufacturing, non-food articles, non-metallic mineral products and transport equipment etc," the industry ministry said in a statement on Monday.
Deflation in food articles narrowed to 3.06 per cent in August, from 6.29 per cent in the previous month. Deflation in vegetables and pulses eased to 14.18 per cent and 14.85 per cent from 28.96 per cent and 15.12 per cent, respectively.
In potato and onion, however, the deflation deepened to 44.11 per cent and 50.46 per cent in August, from 41.26 per cent and 44.38 per cent, respectively, in July.
Narrower food WPI deflation and higher core inflation have offset the deeper deflation in fuel in August, Barclays said, adding it expects modest increases in WPI in the coming months.
In the case of manufactured products, inflation was higher at 2.55 per cent in August, as against 2.05 per cent in the month before.
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Industry chamber PHDCCI President Hemant Jain said among manufactured products, major contributors to inflation were vegetable and animal oils & fats, textiles, and rubber & plastic products, which may reflect in production costs with a lag.
"Going forward, we expect WPI inflation to moderate with the government's continued support through structural reforms such as GST 2.0," Jain added.
ICRA Senior Economist Rahul Agrawal said the hardening in prices was broad-based across all segments, except fuel and power, which witnessed a deeper deflation in August 2025 as compared to July 2025.
Negative inflation or deflation in the 'fuel and power' basket was 3.17 per cent in August, as against 2.43 per cent in July.
ICRA expects the headline WPI to rise further to a six-month high of 0.9 per cent in September 2025, led by a hardening in the year-on-year prints for global crude oil and commodity prices, as well as the depreciation in the USD/INR pair.
"While the expectations of a relatively more favourable CPI inflation trajectory following the GST rationalisation opens up space for a rate cut by the MPC, the positive impact of the same on growth outcomes in H2 FY2026, along with the stronger-than-expected GDP growth in Q1 is likely to result in a status quo in the upcoming October (MPC) review meeting," Agrawal said.
The Reserve Bank of India (RBI), which takes into account retail inflation, had kept benchmark policy rates unchanged at 5.5 per cent last month.
After declining for nine months since November 2024, retail inflation inched up to 2.07 per cent in August, driven by a rise in prices of kitchen items, like vegetables, meat, fish, and eggs, data released last week showed.