WPI Food Inflation Expected to Decline Below 7% in February
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Synopsis
Experts predict a decline in India's wholesale price index food inflation to below 7% in February, down from 7.5% in January. This is attributed to reduced vegetable prices and improved crop production, which has also impacted year-on-year inflation rates positively.
Key Takeaways
- WPI-food inflation projected below 7% in February.
- January's inflation was at 7.5%.
- Significant drop in vegetable prices influenced the overall index.
- 14 out of 22 food items saw price reductions.
- ICRA forecasts average WPI of 2.4% in FY2025.
New Delhi, Feb 14 (NationPress) Industry analysts reported on Friday that India's Wholesale Price Index (WPI)-food inflation is anticipated to drop further to below 7.0 per cent in February, down from 7.5 per cent in January.
The year-on-year (YoY) WPI-food inflation decreased to a five-month low of 7.5 per cent in January, compared to 8.9 per cent in December 2024, largely driven by a significant decline in vegetable prices, which applied a downward pressure of 44 basis points to the overall index during this period.
Rahul Agrawal, Senior Economist at ICRA, noted, “The seasonal decrease in food prices during January was somewhat greater than anticipated. Vegetable prices, in particular, plummeted by 22.7 per cent in January 2025 compared to December 2024.”
Notable declines were observed in the prices of tomatoes and potatoes.
Data from the Department of Consumer Affairs indicated that the average wholesale prices of 14 out of 22 food items fell sequentially in February (up to February 13), including rice, all pulses, milk, various edible oils (such as groundnut and mustard oil), as well as vegetables (notably potato, onion, and tomato).
This decline was primarily attributed to enhanced production and the fresh arrival of crops across the nation. Most of these items also exhibited a reduction in their year-on-year (YoY) inflation rates in February 2025 (up to February 13, 2025) compared to January 2025.
Overall, ICRA forecasts that the WPI will average 2.4 per cent in FY2025.
The WPI inflation fell to 2.3 per cent in January from 2.4 per cent in December, influenced by the moderation in food inflation.
Looking ahead, as the Fed opts to maintain rates ‘higher for longer’, global demand outlook has been adversely affected, applying some downward pressure on oil and other commodity prices, commented Sonal Badhan, economist at Bank of Baroda (BoB).
Meanwhile, the final Wholesale Price Index inflation rate for November 2024 has been adjusted to 2.16 per cent.
