Wholesale Inflation Falls to 14-Month Low at 0.39% in May
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
By : Madhusudan Sahoo
Update: 2025-06-16 12:12 GMT
New Delhi: After headline retail inflation touched an all-time low, wholesale inflation dropped to a 14-month low of 0.39 per cent for May 2025 over the same period last year. Amid geopolitical tensions, this offered major relief from rising prices of essential food items. The decline in wholesale prices was mostly aided by significant contributions from primary articles, fuel, power, and minerals, the government said on Monday.
According to data from the Ministry of Industry, 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. It stood at 2.74 per cent in May last year. “The WPI inflation in May is in a positive zone primarily due to an increase in prices of manufacture of food products, electricity, other manufacturing, chemicals and chemical products, manufacture of other transport equipment, and non-food articles,” the ministry said.
The data showed that food articles saw a deflation of 1.56 per cent in May, compared to 0.86 per cent in April, with vegetables, onions, potatoes, and pulses recording negative inflation. “Deflation in vegetables was 21.62 per cent in May, compared to 18.26 per cent in April. Similarly, fuel and power also saw deflation of 2.27 per cent in May, compared to 2.18 per cent inflation in April. Manufactured products, however, saw positive inflation at 2.04 per cent, compared to 2.62 per cent in April,” the data showed.
The Reserve Bank of India (RBI) mainly considers retail inflation while formulating monetary policy. Last week’s data showed that retail inflation eased to an over six-year low of 2.82 per cent in May, mainly due to subdued food prices. The RBI this month cut benchmark policy interest rates by a sharp 0.50 per cent to 5.50 per cent amid easing inflation.
Economists and analysts noted that the cooling in WPI was broad-based, with the food, non-food manufacturing, minerals, and fuel and power segments contributing to the dip in the headline print between these months. “Notwithstanding the early onset of the southwest monsoon, its progress halted in early June, with a significant lag of 31 per cent over normal levels up to June 15, 2025. The temporal and spatial distribution of the monsoon remains key for the crop outlook and, consequently, food inflation,” said ICRA’s senior economist Rahul Agrawal.
ICRA also said crude oil prices have risen sharply this month following an escalation of tensions between Israel and Iran. “Higher crude oil prices, along with some depreciation in the INR relative to the US dollar, would impart upward pressure on the WPI inflation print for June 2025, which is nevertheless likely to remain benign at around 0.6-0.8 per cent,” Agrawal added.