New Delhi: Staying in the negative zone for the second consecutive month in a row, wholesale price inflation (WPI) dipped to a 2-year low of at (-) 0.58 per cent in July from a 0.13 per cent in June this year, as prices of some food articles and fuel witnessed deflation, even though prices of manufactured items increased, government data showed on Thursday.
As per the data, the WPI inflation was 2.10 per cent in July last year. However, the government said the decline in wholesale prices is attributed to mainly subdued prices of food items. “Negative rate of inflation in July 2025 is primarily due to a decrease in prices of food articles, mineral oils, crude petroleum & natural gas, manufacture of basic metals, etc,” the industry ministry said in a statement.
The data, however, showed that the deflation in food articles widened to 6.29 per cent in July as against a deflation of 3.75 per cent in June, vegetables witnessed a significant drop in the segment. “Deflation in vegetables was 28.96 per cent in July, compared to 22.65 per cent in June,” the data showed.
“Similarly, fuel and power saw a negative inflation or deflation of 2.43 per cent in July, as against 2.65 per cent in June. On the contrary, in the case of manufactured products inflation was higher at 2.05 per cent in July, as against 1.97 per cent in the month before,” the data showed.
In order to tame inflation, the Reserve Bank of India (RBI) had kept benchmark policy rates unchanged at 5.5 per cent earlier this month. The retail inflation in July dropped to an 8-year low of 1.55 per cent. Experts, however, foresee that WPI inflation may move back into positive territory in August, as base effects fade and seasonal price increases continue.
Icra’s senior economist Rahul Agrawal said that the deflation in wholesale inflation was largely driven by the food segment, which witnessed a larger year-on-year contraction, led by vegetables, pulses, and eggs, meat & fish and similar to the CPI, the WPI is also likely to have bottomed out in July 2025.
“Looking ahead, Icra expects the headline WPI to re-enter the inflationary territory in August 2025, after a gap of two months, amid the hardening in YoY prints for food and crude oil so far, depreciation in the USD/INR pair, as well as an unfavourable base,” he said, adding that heavy rains could push up perishable prices sharply in the second half of August, and remain a key monitorable.
Barclays in a research note also said that July wholesale price inflation was driven by lower food and energy prices. “The continued negative print in headline in year-on-year terms despite the month-on-month rise in wholesale prices is explained by base effects,” Barclays said.
New Delhi: Staying in the negative zone for the second consecutive month in a row, wholesale price inflation (WPI) dipped to a 2-year low of at (-) 0.58 per cent in July from a 0.13 per cent in June this year, as prices of some food articles and fuel witnessed deflation, even though prices of manufactured items increased, government data showed on Thursday.
As per the data, the WPI inflation was 2.10 per cent in July last year. However, the government said the decline in wholesale prices is attributed to mainly subdued prices of food items. “Negative rate of inflation in July 2025 is primarily due to a decrease in prices of food articles, mineral oils, crude petroleum & natural gas, manufacture of basic metals, etc,” the industry ministry said in a statement.
The data, however, showed that the deflation in food articles widened to 6.29 per cent in July as against a deflation of 3.75 per cent in June, vegetables witnessed a significant drop in the segment. “Deflation in vegetables was 28.96 per cent in July, compared to 22.65 per cent in June,” the data showed.
“Similarly, fuel and power saw a negative inflation or deflation of 2.43 per cent in July, as against 2.65 per cent in June. On the contrary, in the case of manufactured products inflation was higher at 2.05 per cent in July, as against 1.97 per cent in the month before,” the data showed.
In order to tame inflation, the Reserve Bank of India (RBI) had kept benchmark policy rates unchanged at 5.5 per cent earlier this month. The retail inflation in July dropped to an 8-year low of 1.55 per cent. Experts, however, foresee that WPI inflation may move back into positive territory in August, as base effects fade and seasonal price increases continue.
Icra’s senior economist Rahul Agrawal said that the deflation in wholesale inflation was largely driven by the food segment, which witnessed a larger year-on-year contraction, led by vegetables, pulses, and eggs, meat & fish and similar to the CPI, the WPI is also likely to have bottomed out in July 2025.
“Looking ahead, Icra expects the headline WPI to re-enter the inflationary territory in August 2025, after a gap of two months, amid the hardening in YoY prints for food and crude oil so far, depreciation in the USD/INR pair, as well as an unfavourable base,” he said, adding that heavy rains could push up perishable prices sharply in the second half of August, and remain a key monitorable.
Barclays in a research note also said that July wholesale price inflation was driven by lower food and energy prices. “The continued negative print in headline in year-on-year terms despite the month-on-month rise in wholesale prices is explained by base effects,” Barclays said.
