Wholesale inflation eases marginally to 9.78% in July as fuel prices cool | Economy & Policy News

The wholesale price inflation (WPI) rate based on the 2022-23 series eased marginally to 9.78 per cent in July from a series-high 9.87 per cent in June, as a sharp cooling in energy costs offset a broad-based hardening in prices of food, primary articles and manufactured goods, according to data released by the Ministry of Commerce and Industry on Friday.

 

The all-commodities index eased to 110 in July from 110.2 in June. The ministry also released India’s goods output producer price index (PPI), where the index was unchanged at 109.9, keeping the PPI inflation rate unchanged at 9.57 per cent.

 
 

Fuel and power inflation slowed to 20.05 per cent in July from 27.41 per cent in June as crude petroleum and natural gas inflation fell to 26.99 per cent from 34.75 per cent and mineral oils eased to 32.4 per cent from 46.48 per cent. Electricity inflation turned positive at 1.09 per cent for the first time since July 2025.

 

For primary articles, in contrast, inflation jumped to 8.52 per cent in July, the highest in 21 months, from 7 per cent in June. Within the group, food inflation moderated to 5.44 per cent from 5.49 per cent in the preceding month, while non-food articles and minerals both showed an uptick in their inflation levels from 11.07 per cent and 9.45 per cent to 17.66 per cent and 13.28 per cent, respectively.

 

Core WPI, which strips out food and fuel, rose to 8.2 per cent from 7.5 per cent, Sonal Badhan, economist at Bank of Baroda, said in a research note.

 

The WPI food index, which combines primary food articles with manufactured food products, rose to a 16-month high of 6.65 per cent in July from 6.14 per cent in June.

 

The rate for manufactured products, which carry a weighting of 63.1 per cent, rose to 8.29 per cent from 7.48 per cent — the highest in the current 2022-23 series. Within manufactured products, food, textiles, wearing apparel, leather products, chemical products and pharmaceuticals, among others, witnessed hardening in their prices during the month.

 

Bank of Baroda struck a note of caution on the outlook. “Going forward, as hopes of a peace deal between US and Iran diminish and 2 key waterways remain under threat (Strait of Hormuz and Bab al-Mandeb Strait), volatility in oil prices can be expected,” Badhan said.

 

She noted that the effect of El Niño was expected to strengthen over August and September, keeping pressure on food inflation and the headline number. “Higher cost of insurance will add to the total freight cost, which in turn will pose upside pressures on imported commodities,” she added.

 

Among output PPI major groups, the indices for agriculture, forestry and fishing; mining and quarrying; manufactured products; and electricity stood at 115.6, 119.4, 108.8 and 92.4, respectively, in July, against 114.1, 121.5, 109.2 and 92.0 in June. The trial input PPI for manufacturing, published on an experimental basis since March, eased to 105.9 in July from 107.1 in June.

 

Rahul Agrawal, principal economist at ICRA, said that the agency anticipates a larger easing in WPI inflation to below 9.5 per cent in August. “Nevertheless, prints are likely to remain elevated through much of the year, with an average WPI inflation forecast of around 8.5 per cent for FY27, feeding into a high nominal GDP growth figure as well,” he added.