Wholesale price inflation (WPI) turned negative after a gap of 19 months, declining 0.13 per cent in June as deflation widened in food articles and fuel, and manufactured product costs softened.
According to the government data released on Monday, WPI-based inflation was 0.39 per cent in May and 3.43 per cent in June last year. “Negative rate of inflation in June 2025 is primarily due to decrease in prices of food articles, mineral oils, manufacture of basic metals, crude petroleum and natural gas,” the Union Industry Ministry said in a statement.
According to WPI data, food articles saw a deflation of 3.75 per cent in June as against a deflation of 1.56 per cent in May with vegetables prices dropping sharply. Deflation in vegetables was 22.65 per cent in June and 21.62 per cent in May.
Inflation in the case of manufactured products was 1.97 per cent as compared to 2.04 per cent in May. Fuel and power saw a negative inflation or deflation of 2.65 per cent in June as compared to a deflation of 2.27 per cent in May.
PHDCCI President Hemant Jain said the continuous softening of WPI inflation for seven months in a row is a positive sign for higher economic growth in India. “Looking ahead, considering the rise in domestic demand, expectations of a normal monsoon and strong overall economic activity in the country, we anticipate WPI inflation to remain moderate in the coming months despite ongoing geopolitical uncertainties,” said Jain.
ICRA senior economist Rahul Agrawal said the seasonal sequential uptick in food prices has been relatively modest in July so far, which is expected to keep food prices in the deflationary zone unless there is an unusual surge in their prices in the next two weeks, especially the prices of vegetables.
Besides, international crude oil prices have also eased somewhat in July from the peak witnessed in June amid easing tensions in West Asia, while remaining in the deflationary zone on a year-on-year basis. “Overall, ICRA expects WPI to remain in the deflationary territory in July 2025 despite an unfavourable base, amid the sustained YoY deflation in food and crude oil prices," Agrawal said.
Retail inflation slips to six-year low
Retail inflation slipped to a more than six-year low of 2.1 per cent in June mainly due to subdued prices of food items, including vegetables, pulses, meat and milk. On the other hand, the Consumer Price Index-based inflation was 2.82 per cent in May and 5.08 per cent in June last year.
Year-on-year inflation rate based on Consumer Price Index (CPI) for June 2025 over June, 2024 is 2.1 per cent, the National Statistics Office (NSO) said in a statement. The RBI mainly takes into account retail inflation while formulating the monetary policy.
“There is a decline of 72 basis points in headline inflation of June 2025 in comparison to May last year. It is the lowest year-on-year inflation after January 2019,”" the NSO said. The previous low of 1.97 per cent was recorded in January 2019.
The NSO said the significant decline in retail inflation and food inflation in June 2025 can be majorly attributed to favourable base effect and decline in inflation of vegetables, pulses and products, meat and fish, cereals and products, sugar and confectionery, milk and products and spices.
Follow us
