Daijiworld Media Network – New Delhi
New Delhi, Jul 11: Wholesale inflation in the country is likely to have inched up to 0.80% year-on-year in June 2025, from 0.39% in May, primarily due to a rise in food, fuel and core commodity prices, stated Union Bank of India in its latest economic outlook report.
The report noted that core WPI inflation, which excludes food and fuel, jumped notably from 0.86% in May to 1.63% in June, reflecting pressure from rising global and domestic commodity prices.
“The Wholesale Price Index (WPI) for June 2025 likely reversed its softening trend and increased to 0.80%, driven mainly by core inflation fuelled by commodity prices,” the report stated.
While yearly food inflation showed signs of moderation, food prices on a month-on-month basis continued to climb, pushing inflationary pressures higher. Food WPI is estimated to have eased to 0.60% in June, down from 1.72% in May, suggesting some cooling off, but not enough to offset the broader price movement.
Fuel prices, though still in deflationary territory, showed a reduction in the pace of contraction. The report pegged fuel WPI at -1.82% in June, an improvement over -3.87% recorded in May.
Union Bank economists highlighted that the increase in wholesale inflation is largely attributable to the rising cost of commodities, which in turn pushed core inflation upwards. However, the bank cautioned that inflation in the coming months remains exposed to several risk factors.
The report underlined concerns over volatile global commodity prices, especially in light of emerging tariff wars and geopolitical uncertainties. Although soft global demand and adequate supply might limit the upside, any escalation in international tensions could further impact price stability, the report warned.
Additionally, uncertainty over the progress of the monsoon season could impact agricultural output and prices. Weather disruptions and geopolitical challenges affecting supply chains may lead to short-term upward pressure on wholesale prices, especially in the agri-sector.
The report concluded by stating that while inflation stayed moderate in June, the overall outlook remains uncertain with global and weather-related developments posing potential challenges to India's price stability.