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WPI inflation falls to 14-month low in May as food, fuel prices dip

2025-06-16 00:00:00.0 商业标准报-经济和政策原网页

Inflation based on the wholesale price index (WPI) declined to a 14-month low of 0.39 per cent in May from 0.85 per cent in April on the back of a dip in food and fuel prices, according to the data released by the Commerce and Industry ministry on Monday. Price rise also decelerated in the manufactured products category, the data showed.

Prices of primary food articles (-1.56 per cent) declined for the second month in a row. The trend was led by a double-digit decline in the prices of vegetables (-21.6 per cent), pulses (-10.4 per cent), potato (-29.4 per cent) and onion (-14.4 per cent).

Protein-rich food like eggs, meat and fish declined by 1.01 per cent — the second month in a row. The price rise in cereals

(2.56 per cent), paddy (0.96 per cent) and wheat (5.75 per cent) decelerated during the month. Meanwhile, the price rise in other food items like fruits (10.17 per cent) and milk (2.66 per cent) accelerated during the month.

Fuel and power prices declined 2.27 per cent in May. The drop in global commodity prices, especially of mineral oils, led to a further decline in the prices of petrol (-8.5 per cent) and high-speed diesel (-5.61 per cent) for the 12th and 25th consecutive month, respectively.

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WPI food index

WPI food inflation in May cooled to 1.72 per cent, compared to 2.55 per cent in April, reflecting a moderation in wholesale food prices. The WPI food index has increased from 189.3 in April to 189.5 in May.

Prices of primary food articles fell by 1.56 per cent in May, marking the second consecutive month of decline. This drop was largely driven by steep decreases in the prices of vegetables (-21.6 per cent), pulses (-10.4 per cent), potatoes (-29.4 per cent), and onions (-14.4 per cent). Protein-rich items such as eggs, meat, and fish also saw a 1.01 per cent decline for the second straight month. Meanwhile, the rate of price increase slowed for cereals (2.56 per cent), paddy (0.96 per cent), and wheat (5.75 per cent) during the same period.

WPI inflation in May: Fuel and power

The WPI inflation rate for fuel and power fell deeper into negative territory at -2.27 per cent in May, against -2.18 per cent in April. The index for this key category fell by 0.95 per cent to 146.7 in May 2025, down from 148.1 in April 2025. During the same period, the price of mineral oils dropped by 2.06 per cent, while the prices of coal and electricity rose by 0.81 per cent, and 0.80 per cent, respectively. Manufacturing sector

Inflation in manufactured goods stood at 2.04 per cent in May, easing from 2.62 per cent recorded in April.

The decline in wholesale price inflation follows closely on the heels of retail inflation, which dropped to a 75-month low of 2.82 per cent in May. This moderation was largely driven by a sharp fall in vegetable prices and the steepest drop in pulse prices seen in more than six years.

What is India’s inflation outlook for 2025?

During its bi-monthly monetary policy review in April, the Reserve Bank of India (RBI) projected consumer price index (CPI)-based inflation at 4 per cent for the ongoing financial year (FY26), assuming a normal monsoon. For the first quarter (April-June), inflation is expected to moderate further to 3.6 per cent, a notable revision from the previous estimate of 4.5 per cent.

The RBI’s quarterly inflation projections for FY26 are as follows:

-Q1: 3.6 per cent

-Q2: 3.9 per cent

-Q3: 3.8 per cent

-Q4: 4.4 per cent

The wholesale price index (WPI) data for June 2025 will be released on July 14, 2025.

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