India’s wholesale price index (WPI)-based inflation dropped sharply to 0.39% in May 2025, compared to 0.85% in April 2025, marking the lowest level in 14 months, according to data released by the Ministry of Commerce and Industry.
The sharp decline in wholesale inflation is primarily attributed to easing prices in manufactured products and fuel. This is a significant development, especially as retail inflation remains elevated and the Reserve Bank of India continues to maintain a cautious stance on interest rates.
Key highlights:
-
WPI Inflation (May 2025): 0.39%
-
WPI Inflation (April 2025): 0.85%
-
14-month low, last seen at similar levels in March 2024
Sectoral breakdown:
-
Fuel and power prices saw a notable cooling, aligning with global trends in crude oil fluctuations during May.
-
Manufactured products also contributed to the softening of inflation, reflecting subdued demand conditions and improved input cost efficiencies.
-
Primary articles witnessed some uptick, but were insufficient to offset the broader slowdown.
This data is expected to have positive implications for the Indian economy, potentially relieving cost pressures for businesses and aiding monetary policy flexibility in the coming quarters.
