Food Prices Push Up WPI In August While Retail Inflation Stays Low At 2.07%

The latest figures highlight that while wholesale inflation has ticked upwards, retail inflation remains modest and firmly within the Reserve Bank of India’s (RBI) comfort range.

While food products contributed to the rebound in WPI inflation, the energy segment continued to move in the opposite direction.

Source : ABPLIVE AI

Wholesale inflation in India edged into positive territory in August 2025, with the Wholesale Price Index (WPI) climbing to 0.52 per cent. The rise, according to the Ministry of Commerce and Industry, was largely fuelled by higher prices of food products, non-food articles, certain manufactured goods, non-metallic mineral products, and transport equipment.

This comes after July witnessed a two-year low in wholesale inflation at (-) 0.58 per cent, driven by cheaper food articles, reported IANS.

The latest figures highlight that while wholesale inflation has ticked upwards, retail inflation remains modest and firmly within the Reserve Bank of India’s (RBI) comfort range.

Food and Fuel Trends Diverge

While food products contributed to the rebound in WPI inflation, the energy segment continued to move in the opposite direction. Fuel inflation stayed in negative territory at -3.17 per cent in August, with petrol, diesel, and natural gas prices still on a downward trajectory. This divergence reflects contrasting pressures across different components of the inflation basket.

On a sequential basis, the WPI rose by 0.52 per cent in August over the previous month, underscoring a turnaround after July’s decline.

CPI Inflation Stays Low Despite Food Price Relief

Parallel to the wholesale data, the Consumer Price Index (CPI) revealed retail inflation of 2.07 per cent in August. Though slightly higher than July’s 1.61 per cent, the lowest retail inflation since mid-2017, it remains well below the RBI’s 4 per cent target, giving policymakers room to continue accommodative monetary measures.

Interestingly, food inflation under CPI remained in the negative for the third month in a row at -0.69 per cent. Vegetable prices fell sharply by 15.92 per cent, pulses became cheaper by 14.53 per cent, and spices recorded a 3.24 per cent fall. However, costs for meat and fish, edible oils, fats, and eggs pushed overall headline inflation higher compared to July.

RBI Outlook Remains Comfortable

The central bank expects consumer inflation to average 3.1 per cent in 2025-26, underpinned by favourable conditions such as steady monsoon progress, robust kharif sowing, healthy reservoir levels, and adequate buffer stocks of foodgrains.

RBI Governor Sanjay Malhotra recently noted, "The inflation outlook for 2025-26 has become more benign than expected in June. Large favourable base effects combined with steady progress of the southwest monsoon, healthy kharif sowing, adequate reservoir levels and comfortable buffer stocks of foodgrains have contributed to this moderation."

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