New Delhi: The Wholesale Price Index (WPI) inflation in India is projected to decrease to 2 percent in February 2025, down from 2.3 percent in January, primarily due to falling oil prices and a seasonal reduction in food prices, as reported by Union Bank of India.
The report emphasized that the decrease in WPI inflation is significantly influenced by a drop in vegetable prices, a major factor in food inflation.
It stated, "The Wholesale Price Index (WPI) is anticipated to ease to 2.0 percent (year-on-year) in February 2025, down from 2.3 percent in the previous month, attributed to a decline in oil prices and seasonal reductions in food prices."
Within the food category, vegetable prices are projected to have decreased by 12 percent month-on-month. Conversely, edible oil prices experienced a slight uptick during the same period. Additionally, prices for manufactured food items remained stable, as key inputs like sugar and edible oil saw only minor increases.
The report further noted that the fuel index, which monitors price fluctuations in petroleum products, is expected to remain in negative territory in February, following a slight rise over the past two months. This decrease in fuel prices is linked to global economic uncertainties during the second term of U.S. President Donald Trump, which have resulted in reduced oil demand.
In addition, core WPI, which excludes food and fuel, also indicated signs of moderation in February. A decline in global energy prices has contributed to the alleviation of inflationary pressures, although a rise in metal prices has somewhat constrained the extent of this decline.
Core WPI reflects price changes in non-food manufactured goods, which are closely tied to global commodity price trends.
Over 40 percent of the raw materials utilized in manufacturing are sourced from abroad, meaning fluctuations in global commodity prices directly affect domestic inflation rates.
Looking forward, the report indicated that WPI inflation is anticipated to persist in its decline, driven by decreasing fuel and commodity prices on a global scale. Furthermore, a seasonal decrease in food prices is expected to aid in reducing overall inflation.
Nevertheless, the report warned that persistent trade conflicts and interruptions in global supply chains may affect future pricing trends. These influences will be carefully observed in the upcoming months.
