WPI Inflation rises to four-month high of 0.52% in August

India’s wholesale price-based inflation rose to a four-month high of 0.52% in August 2025, led by higher food and manufactured product prices, according to data released by the Ministry of Commerce and Industry on Monday.The Wholesale Price Index (WPI), a key gauge of factory-gate inflation, had slipped to a two-year low of -0.58% in July and remained in the deflationary zone in June. “The change in wholesale prices trajectory after a couple of months of deflation was largely due to an upswing in food prices,” said Paras Jasrai, Associate Director at India Ratings and Research.
According to information,food prices in August were 0.2% higher year-on-year, with the decline in vegetable prices slowing to 14.2%—the weakest pace in six months. Edible oil prices surged 22.9% in August, the sharpest rise in three months, while jewellery prices spiked 32.6% on an annual basis. This pushed core inflation to a five-month high of 1.6%. Jasrai noted that a low base effect till the end of 2025 is likely to keep core inflation around 1.8%.According to Rahul Agrawal, Senior Economist at ICRA, food items contributed 73 basis points of the 110 bps uptick in the headline WPI print between July and August, followed by core WPI (non-food manufactured items), which added 27 bps.Despite the uptick, several food items were cheaper than a year ago. Onion prices in August were less than half of last year’s levels, potato prices were down 44.1%, pulses were cheaper by 14.9%, and fruit prices fell 4.9% on an annual basis. However, milk (up 2.6%), wheat (up 4.8%), and non-food articles (up 5.6%) became costlier.
Meanwhile,economists noted that while expectations of a softer consumer price index (CPI) inflation following GST rationalisation could create room for a potential Reserve Bank of India rate cut, strong GDP growth in Q1 FY26 may keep the central bank on hold in its upcoming October 2025 policy review. “The positive impact of GST changes on growth outcomes, coupled with stronger-than-expected GDP numbers, is likely to result in a status quo,” Agrawal said.

(Business Correspondent)