Headline Retail Inflation Dipped To More Than Six-year Low Of 2.1pc In June

New Delhi: In a major relief to the common man, headline retail inflation dipped to a more than six-year low of 2.1 per cent in June, mainly due to subdued prices of food items such as vegetables, pulses, meat, and milk among others. At the same time, wholesale price inflation (WPI) also stayed in a negative zone after a gap of 19 months, declining 0.13 per cent in June due to cheaper prices in food articles and fuel, and with softening in manufactured product costs, two separate government data showed on Monday.

According to the National Statistics Office (NSO) data, consumer price index or CPI-based inflation was 2.82 per cent in May and 5.08 per cent in June 2024. “Year-on-year inflation rate based on CPI for June 2025 over June 2024 is 2.1 per cent. The previous low of 1.97 per cent was recorded in January 2019,” the government said in a statement.

“The significant decline in headline inflation and food inflation during the month of June 2025 is mainly attributed to favourable base effect and decline in inflation of vegetables, pulses and products, meat and fish, cereals and products, sugar and confectionery, milk and products and spices,” the government added.

Commenting on the retail inflation, Aditi Nayar, chief economist, ICRA Ltd said that the cooling was entirely led by the food and beverages segment after a gap of 75 months. “This was led by softer prints for 11 of the 12 sub-groups, including a widening deflation in vegetables, pulses, spices, and meat and fish,” Nayar said.

However, ICRA remains watchful of the episodes of heavy rainfall and flooding across some states in the remaining part of monsoon season that could damage crops that are already sown and consequently impact food prices. “Looking ahead, while food prices have witnessed a seasonal sequential uptick in July 2025 so far, the extent of the same has been relatively benign compared to that seen in the year ago month, particularly in the case of vegetables,” she said.

Meanwhile, another government data showed wholesale inflation turned negative after a gap of 19 months, declining 0.13 per cent in June as deflation widened in food articles and fuel, along with softening in manufactured product costs. The WPI-based inflation was 0.39 per cent in May, while it was 3.43 per cent in June last year.

As per the industry ministry, the WPI data showed that food articles witnessed a deflation of 3.75 per cent in June, as against a deflation of 1.56 per cent in May, with vegetables seeing a sharp drop. “Deflation in vegetables was 22.65 per cent in June compared to 21.62 per cent in May. 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,” the ministry said.

In the case of manufactured products, the data further showed that inflation was at 1.97 per cent, compared to 2.04 per cent in May. “Similarly, fuel and power saw a negative inflation or deflation of 2.65 pc in June compared to a deflation of 2.27 pc in May. “The continuous softening of WPI inflation for seven months in a row is a positive sign for higher economic growth in India,” said PHDCCI president Hemant Jain.

“Looking ahead, considering the rise in domestic demand, expectations of a normal monsoon, and strong overall economic activity in the country, we anticipate WPI inflation to remain moderate in the coming months despite ongoing geopolitical uncertainties,” Jain added.