Wholesale Inflation Eases In January, Food Prices Decline, Shows Data

The Wholesale Price Index (WPI) based inflation improved to 2.31 per cent in January 2025, against 2.37 per cent recorded a month earlier in December 2024, the data revealed.

In vegetables, tomato prices dropped 18.9 per cent, while inflation in potatoes continued to be elevated at 74.28 per cent. Meanwhile, inflation in onion surged to 28.33 per cent in January.

Source : ABPLIVE AI

Wholesale price inflation eased a bit in January as the prices of food items declined, official data released on Friday stated. The Wholesale Price Index (WPI) based inflation improved to 2.31 per cent in January 2025, against 2.37 per cent recorded a month earlier in December 2024, the data revealed.

The data showed that inflation in meat and fish declined to 3.56 per cent in January, from 5.43 per cent recorded in the earlier month. In the fuel and power category, a deflation was recorded as the figure remained at 2.78 per cent in January, as compared to 3.79 per cent seen in December 2024. 

In manufactured items, inflation eased to 2.51 per cent from 2.14 per cent on a sequential basis. The Consumer Price Index (CPI) based inflation also moderated to a 5-month low of 4.31 per cent in January as the prices of food items eased.

Inflation Eases In Vegetables

The official figures showed that inflation in food items relaxed to 5.88 per cent in the month under review, in comparison to the steep 8.47 per cent clocked in December 2024. Vegetables, particularly, became cheaper as inflation in vegetables improved to 8.35 per cent in January, from a whooping high of 28.65 per cent clocked in the preceding month. 

In vegetables, tomato prices dropped 18.9 per cent, while inflation in potatoes continued to be elevated at 74.28 per cent. Meanwhile, inflation in onion surged to 28.33 per cent in January.

Rahul Agrawal, Senior Economist, ICRA, said that the WPI is expected to average at 2.4 per cent in the 2024-25 fiscal year (FY25). “We project the WPI to average at 2.4 per cent in FY2025 and inch up further to 3 per cent in FY2026, despite expectations of a cooling in the prints for the food segment,” he noted.

Challenges Ahead

Meanwhile, Rajani Sinha, Chief Economist, CARE Ratings, explained that food prices are projected to ease a bit in the coming months as seasonal correction occurs. He noted that the challenges to global commodity prices included the increasing uncertainty about the trade policies of the new US government under Donald Trump.

“Their prices have been hardening amid growing uncertainty around the impact of the US protectionist trade policies. This would exert an upward pressure on the WPI non-food component. Going ahead, it is crucial to monitor geopolitical developments and global trade uncertainties closely, as these could significantly influence global commodity markets and supply chains. Besides, rupee depreciation would make imports costlier raising the risk of imported inflation,” Sinha explained.