With a dip in the prices of minerals and non-food items, wholesale inflation — based on Wholesale Price Index (WPI) — eased to 0.39 per cent in May, down from 0.85 per cent of April, the Commerce & Industry reported on Monday.

“The positive rate of inflation in May 2025 is primarily due to increase in prices of manufacture of food products, electricity, other manufacturing, chemicals and chemical products, manufacture of other transport equipment and non-food articles, etc,” the Ministry said in a statement.

As per the WPI data, food articles saw a deflation of 1.56 per cent in May, against 0.86 per cent in April, with vegetables seeing a sharp drop. Deflation in vegetables was 21.62 per cent in May, compared to 18.26 per cent in April.

Manufactured products, however, saw inflation at 2.04 per cent, compared to 2.62 per cent in April. Fuel and power, too, saw a deflation of 2.27 pc in May, compared to a 2.18 per cent inflation in April.

According to Rahul Agrawal, Senior Economist at ICRA, as many as 20 of the 22 food items for which data is released by the Department of Consumer Affairs, reported an easing in their YoY inflation rate in June(until June 15) compared to May, partly aided by a favourable base. Given these trends, “ICRA expects the WPI-food inflation to soften further in June from 1.7 per cent in May,” he said. Notwithstanding the early onset of the South-west monsoon, the progress of the same had halted in early-June, with a significant lag of 31 per cent over the normal levels up to June 15. The temporal and spatial distribution of the monsoon remains key for crop outlook, and consequently, food inflation.

Crude oil prices have risen quite sharply in the ongoing month, following the escalation of tensions between Israel and Iran. The price of the Indian basket of crude oil has averaged 4.3 per cent higher on a M-o-M basis during June 1-13, 2025, after contracting continuously since February 2025. Moreover, the extent of the YoY deflation in such prices has also narrowed in the month, relative to May 2025.

“Higher crude oil prices, along with some depreciation in the INR relative to the USD, 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 in June 2025,” Agrawal added.

Hemant Jain, President at PHDCCI said: “Going ahead, given the boost in domestic demand, expectation of a normal monsoon, and strong overall economic activity in the country, we expect WPI inflation to remain benign in the coming months assuming geopolitical tensions abate.”

Published on June 16, 2025