WPI Inflation Declines to 0.13% in September as Food and Fuel Costs Stabilize
Wholesale price inflation in India has shown a notable decline, easing to 0.13% in September, as reported by government data released on Tuesday. This figure marks a decrease from 0.52% in August and a significant drop from 1.91% in September of the previous year. The reduction is primarily attributed to falling prices in food articles and manufactured goods, indicating a shift in the inflation landscape.
Food Prices and Deflation Trends
The latest data reveals a deepening deflation in food articles, which fell to 5.22% in September, compared to 3.06% in August. A significant contributor to this decline was the sharp drop in vegetable prices, which plummeted by 24.41% in September, a stark contrast to the 14.18% decrease observed the previous month. This trend highlights the impact of seasonal variations and supply dynamics on food prices. The industry ministry noted that while food prices have decreased, there has been an increase in the prices of manufactured food products, textiles, and other non-food articles, contributing to the overall inflation figures.
Manufactured Goods and Fuel Prices
Inflation in manufactured products also saw a slight easing, dropping to 2.33% in September from 2.55% in August. Meanwhile, the fuel and power sector continued to experience deflation, registering a rate of 2.58%, down from 3.17% in the previous month. Analysts suggest that the overall trend of lower global commodity prices is likely to keep wholesale inflation subdued in the near future. Aastha Gudwani, Chief Economist at Barclays India, indicated that this environment of declining prices could persist, influencing economic conditions and consumer behavior.
Future Projections and Economic Implications
Looking ahead, India Ratings and Research Associate Director Paras Jasrai pointed out that core inflation has risen to a 31-month high of 1.9%, driven by a significant 34.1% year-on-year increase in jewellery prices. He noted that wholesale inflation remained flat at 0.02% in the second quarter of FY26, marking an eight-quarter low. Jasrai anticipates that a favorable base effect could push the wholesale price index back into deflation in October, estimating a reading of around -0.5%. He emphasized that the near-term inflation trajectory is expected to remain weak, with a potential uptick anticipated by the end of FY26.
Government and Industry Perspectives
Ranjeet Mehta, CEO and Secretary General of the PHD Chamber of Commerce and Industry, attributed the moderation in wholesale prices to lower food and energy costs, robust agricultural output, and stable global commodity prices. He expressed optimism that wholesale inflation would remain manageable, supported by adequate food supply and government measures aimed at controlling inflation in critical sectors. The harvest of kharif crops and the upcoming rabi produce are expected to play a crucial role in keeping food inflation in check. Meanwhile, the Reserve Bank of India, which focuses on retail inflation for its policy decisions, maintained the benchmark interest rate at 5.5% earlier this month, coinciding with a drop in retail inflation to an eight-year low of 1.5% in September.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
Follow Us on Twitter, Instagram, Facebook, & LinkedIn
