WPI inflation slipped from 9.87% in June, marking the first m-o-m decline under the new 2022-23 base year, even as core price pressures intensified.   | Photo Credit: REUTERS/FRANCIS MASCARENHAS

Wholesale inflation based the Wholesale Price Index (WPI) dropped a tad to 9.78 per cent in July, as against 9.87 per cent in June, the government reported on Friday. This is the first time that inflation has dropped month-on-month under the government’s WPI-based inflation data with the new 2022-23 base year.

Prachi Kele, Lead Economist at PL Capital, felt that wholesale inflation remains uncomfortably high at 9.8 per cent in July, despite a marginal easing from June. It is important to note that manufactured-product inflation accelerated to 8.3%, pointing to persistent cost pressures for producers. “While WPI does not translate directly into retail inflation, sustained energy and input-cost pressures could gradually feed through to consumer prices if they persist,” she said.

WPI has been on an upward trajectory since the beginning of this fiscal, as the West Asia war and the resultant blockade of the Strait of Hormuz — through which the majority of crude oil is imported into India — pushed up global crude and fertilizer costs, which had a spillover effect on food prices.

Inflation rates for major groups, namely, Primary Articles, Fuel and Power, and Manufactured Products stood at 8.52 per cent, 20.05 per cent, and 8.29 per cent, respectively in July, compared to 7 per cent, 27.41 per cent, and 7.48 per cent, respectively in June.

“Across groups, mineral oils (containing petroleum products), food articles, manufacture of basic metals, non-food articles, manufacture of food products, and manufacture of chemicals and chemical products have been major drivers of WPI inflation in July 2026,” the commerce and industry ministry said while releasing the monthly WPI data

The Food Index consists of ‘Food Articles’from Primary Articles major group and ‘Manufacture of Food Products’ from Manufactured Products major group. It observed an inflation of 6.65 per cent in July, compared to 6.14 per cent in June. Wholesale inflation in fuel and power dropped to 20.05 per cent in July, as against 27.41 per cent in June. However, manufactured products saw an uptick in inflation at 8.29 per cent in July, against 7.48 per cent as in June.

According to Rahul Agrawal, Principal Economist at ICRA Ltd core WPI (excluding food and fuel from headline number) inflation hardened to a series high of 8.2 per cent in July from 7.5 per cent  in June, amid an uptick in prints across 16 of the 21 sub-sectors. Looking ahead, “we anticipate a larger easing in the WPI inflation to below 9.5 per cent in August, after peaking at 9.9 per cent each during May-June,” he said.

Nevertheless, prints are likely to remain elevated through much of the year, with an average WPI inflation forecast of around 8.5 per cent for FY2027, feeding into a high nominal GDP growth figure as well, Agrawal concluded.

Published on August 14, 2026