Will WPI Inflation Stay Range-Bound in the Near Future?
Click to start listening
Synopsis
As India's WPI data reveals deflation for October, experts are optimistic about the stability of WPI inflation due to favorable crude oil prices and solid food stocks. Discover how these factors could shape economic trends in the near future.
Key Takeaways
- WPI inflation fell to (-)1.21% in October.
- International crude oil prices are stable.
- Comfortable buffer stocks of food grains exist.
- Core WPI inflation increased to 1.5% from 0.3%.
- Vegetable and protein prices are impacting inflation trends.
New Delhi, Nov 14 (NationPress) Following the revelation of India's WPI data for October, which indicated deflation, industry experts on Friday predicted that WPI inflation is likely to remain within a confined range, primarily due to favorable international crude oil prices.
Dr. Ranjeet Mehta, CEO & Secretary General of the PHD Chamber of Commerce and Industry (PHDCCI), stated, "We anticipate that WPI inflation will stay range-bound, supported by mild international crude oil prices, sufficient buffer stocks of food grains, and a healthy kharif harvest."
The Bank of Baroda, a state-owned institution, projected that international commodity and oil prices might experience a slight rise if a resurgence in demand follows the US government’s reopening after a prolonged 43-day shutdown.
However, the bank also noted that a higher-than-expected surplus in global supplies could place downward pressure on oil prices in the future, potentially leading to an increase in fuel inflation over the coming months.
According to government data released on Friday, the Wholesale Price Inflation (WPI) fell into deflation territory at (-)1.21% in October, driven by declines in the prices of food, fuel, and manufactured goods.
WPI-based inflation was recorded at 0.1% in September and 2.8% in October 2024.
This decline was largely attributed to falling prices of food items, crude petroleum, natural gas, electricity, mineral oils, and the production of basic metals, as explained by PHDCCI President Rajeev Juneja.
Core WPI inflation, which excludes food, fuel, and power, increased to 1.5% from 0.3% a year prior, reflecting rising prices in basic metals and aluminum, even as prices for items like computers, motor vehicles, and food and beverages softened, likely due to GST rate reductions.
The bank observed, "Core inflation also rose slightly to 1.5% in October from 0.3% the previous year. Within food categories, declines in vegetables, fruits, and spices contributed to lowering the index, while inflation for protein sources such as eggs, meat, and fish, along with milk, increased."
Point of View
The current WPI inflation trends indicate a cautious optimism among industry experts. The interplay of global commodity prices and domestic agricultural performance will be crucial in maintaining this stability. As always, we remain committed to delivering accurate insights that reflect the economic landscape.
NationPress
14/11/2025
Frequently Asked Questions
What is WPI inflation?
WPI inflation refers to the change in the price of a basket of wholesale goods, reflecting the price movement in the economy and indicating inflationary trends.
Why is the October WPI data significant?
The October WPI data is significant as it shows deflation for the first time, indicating a drop in prices which could have implications for monetary policy and economic growth.
How do international crude oil prices affect WPI inflation?
International crude oil prices play a critical role in determining WPI inflation as they influence transportation, production costs, and ultimately the prices of goods.
What is the expected trend for WPI inflation?
Experts predict that WPI inflation will remain range-bound due to favorable conditions in international oil markets and sufficient food stocks.
What does core WPI inflation indicate?
Core WPI inflation excludes volatile food and energy prices, providing a clearer view of long-term inflation trends in the economy.
