WPI Inflation Slows to 0.39% in May, Driven by Falling Food and Fuel Prices

New Delhi, June 16 – India’s wholesale price inflation (WPI) eased to 0.39% in May 2025, down from 0.85% in April, as prices of food items, manufactured goods, and fuel declined, according to government data released on Monday.  This marks a sharp fall from the 2.74% WPI inflation recorded in May last year, highlighting a continued moderation in wholesale price pressures. This means that the WPI has dropped to its lowest level in 14 months.

Key Drivers Behind the Decline

In May, food prices fell 1.56% from the same month the year before – this was a bigger decline than the 0.86% drop in April. Vegetables had the biggest drop, with deflation going from 18.26% to 21.62% in a month.

Prices in the gasoline and electricity sector fell by 2.27% in May, which was a change from the 2.18% rise in prices in April. Inflation for manufactured goods, on the other hand, dropped from 2.62% to 2.04%, which is a little drop.

The Ministry of Commerce and Industry said that the WPI rate going raised in May was helped by prices going up in some areas, like making food, electricity, chemicals, and non-food items.

Retail Inflation at Six-Year Low

While WPI reflects wholesale price movements, the Reserve Bank of India (RBI) primarily relies on retail inflation to frame its monetary policy. As per data released last week, retail inflation in May dropped to a six-year low of 2.82%, driven by subdued food prices.

In response to the overall inflation trajectory, the RBI cut the benchmark policy interest rate by 50 basis points to 5.50% earlier this month, signaling a pro-growth stance amid easing price pressures.

The latest WPI data reinforces the deflationary trend in key sectors and supports the central bank’s recent policy shift aimed at stimulating economic activity.

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