Wholesale inflation likely rose to 0.8 pc in June on food, fuel price surge: Union Bank of India report

NEW DELHI: Wholesale inflation in India likely surged to 0.80 per cent year-on-year in June 2025 from 0.39 per cent in May, mainly due to a month-on-month rise in food, fuel and core inflation, according to a report by Union Bank of India.

The report highlighted that core WPI, which excludes food and fuel, rose sharply from 0.86 per cent in May to 1.63 per cent in June. It stated, “June’25 WPI likely spiked due to commodity prices led rise in core inflation, Wholesale Price Index (WPI), as per our projections, reversed from the recent low of 0.39 per cent in May’25 and accelerated to 0.80 per cent (y/y) in June ’25”.

While food inflation moderated on a yearly basis, month-on-month prices saw an uptick. The food WPI eased to 0.60 per cent in June from 1.72 per cent in May. On the other hand, fuel inflation remained in the deflationary zone, but the pace of contraction slowed. Fuel WPI was likely at (-)1.82 per cent in June compared to (-)3.87 per cent in May.

The report noted that the rise in June’s WPI was largely driven by commodity prices, which led to an increase in core inflation. However, the report also flagged several risks that could push inflation higher in the coming months.

The bank said that global commodity prices are expected to stay volatile due to uncertainties around tariff wars and ongoing geo-political tensions. While ample global supply and weak demand may limit the upside, any further escalation in conflicts or trade-related tensions could impact price stability.

The report also pointed out that agricultural commodity prices could remain uncertain depending on the progress of the monsoon. Weather-related disruptions and any geopolitical developments affecting the supply chain in agriculture may pose short-term upside risks to wholesale inflation.

Overall, the report outlined that while wholesale inflation likely remained moderate in June, the outlook remains uncertain due to potential risks from global and weather related factors. (ANI)