Softening Of WPI Inflation To Propel Economy On Higher Growth Path: Economists

New Delhi: The persevered softening of wholesale value index (WPI) inflation since December 2024 is a good sign for upper financial expansion in India, economists mentioned on Monday, including that they be expecting WPI inflation to stay benign within the coming months, assuming geopolitical tensions bog down. 

The annual fee of inflation in keeping with the WPI eased additional to a 14-month low of 0.39 in line with cent in May this 12 months from 0.85 in line with cent in April and 2.05 in line with cent in March, in step with the Ministry of Commerce and Industry information.

PHDCCI President Hemant Jain mentioned this used to be in large part pushed by way of an important aid within the costs of number one articles, gasoline and tool, in addition to manufactured product classes.

“This downtrend in wholesale inflation will boost business sentiment as it will result in reduced costs of production,” he added.

The fall in costs of meals articles from (-)0.86 in line with cent to (-)1.56 in line with cent, petrol from 7.70 in line with cent to (-)8.49 in line with cent, and manufactured merchandise from 2.62 in line with cent to 2.04 in line with cent from April to May, respectively, are considerably contributing to the softening of WPI inflation.

ICRA’s senior economist Rahul Agrawal mentioned that aided by way of a beneficial base, the WPI inflation expectedly flattened additional to a 14-month low of 0.4 in line with cent in May 2025 from 0.9 in line with cent in April 2025, printing relatively less than ICRA’s estimate (+0.7 in line with cent) for the month.

“The cooling 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. Notably, the WPI food inflation print slumped to 1.7 per cent in May 2025, the lowest in 19 months, amid the subdued sequential uptick in prices,” he added.

As many as 20 of the 22 meals pieces for which information is launched by way of the Department of Consumer Affairs reported an easing of their annual inflation fee in June (till June 15) in comparison to May, partially aided by way of a beneficial base.

“Given these trends, ICRA expects the WPI-food inflation to soften further in June 2025 from 1.7 per cent in May 2025,” he famous.