Wholesale price inflation eases to 2.31% in Jan

Wholesale price inflation moderated marginally to 2.31 per cent in January due to the decline in prices of food items especially vegetables, government data released on Friday showed.

Photograph: Rupak De Chowdhuri/Reuters

The Wholesale Price Index (WPI) based inflation was 2.37 per cent in December 2024. It was 0.33 per cent in January 2024.

As per the data, inflation in food items eased to 5.88 per cent in January, as against 8.47 per cent in December 2024.

Inflation in vegetables came down significantly to 8.35 per cent, as against 28.65 per cent in December 2024.

In the eggs, meat and fish category inflation declined to 3.56 per cent as against 5.43 per cent last month.

Within vegetables, tomato prices declined to 18.9 per cent while inflation in potato continued to be high at 74.28 per cent, and in onion it spiked to 28.33 per cent in January.

The fuel and power category witnessed a deflation of 2.78 per cent in January, against a deflation of 3.79 per cent in December.

In manufactured items, inflation was 2.51 per cent as compared to 2.14 per cent in December 2024.

Retail inflation data released on Wednesday showed that Consumer Price Index (CPI) based inflation eased to a 5-month low of 4.31 per cent in January on easing prices of food items.

ICRA senior economist Rahul Agrawal said, “We project the WPI to average at 2.4 per cent in FY2025 and inch up further to 3 per cent in FY2026, despite expectations of a cooling in the prints for the food segment”.

According to CARE Ratings Chief Economist Rajani Sinha, food prices are likely to ease in the coming months driven by seasonal correction in prices.

However, there are headwinds as far as global commodity prices are concerned. Their prices have been hardening amid growing uncertainty around the impact of the US protectionist trade policies.

This would exert an upward pressure on the WPI non-food component.

Going ahead, Sinha said it is crucial to monitor geopolitical developments and global trade uncertainties closely, as these could significantly influence global commodity markets and supply chains.

Besides, rupee depreciation would make imports costlier raising the risk of imported inflation.

The rupee has depreciated about 4 per cent against the US dollar so far in the second half of the current financial year.

Earlier this month, RBI slashed the policy rate by 25 basis points to 6.25 per cent in a bid to promote consumption.

The rate cut happened after a gap of 5 years. RBI had last reduced the rate in May 2022.

The monetary policy action in April 2025 monetary policy is dependent on factors, including currency movement and liquidity in the system, Paras Jasrai, Senior Economic Analyst India Ratings and Research said.