WPI Inflation March 2025 Set to Ease to 2.1% Amid Seasonal Drop in Food Prices: Union Bank Report
Key Highlights:
New Delhi, April 9, 2025 – In a positive signal for India’s wholesale inflation trajectory, the Wholesale Price Index (WPI) inflation is expected to cool to 2.1% year-on-year in March 2025, down from 2.4% in February, according to a detailed research report released by Union Bank of India.
Vegetable Price Decline Leads the Moderation
The softening in WPI inflation is largely attributed to a seasonal dip in food prices, particularly vegetables, which saw a 4% month-on-month drop in March. While the decline was slower than previous months, it played a crucial role in easing overall food inflation.
“Food WPI saw a sustained downtick on seasonal trends. Within food, vegetable prices continued to see sequential drop during the month but at a slower pace,” said the Union Bank report.
However, not all food categories followed this downward trend. Edible oils rose by 1.3%, and sugar prices increased by 1% month-on-month. These price upticks are expected to push up the costs of manufactured food products, as these two items serve as key inputs in food processing industries.
Fuel WPI Drops with Global Crude Prices
The fuel component of the WPI also saw a noticeable decline in March, thanks to falling global crude oil prices. This drop in energy costs has cushioned broader inflation pressures and contributed to the overall cooling of the WPI.
Core WPI May Rise on Global Metal Price Surge
Despite positive trends in food and fuel, core WPI inflation, which excludes food and fuel prices, may experience a marginal uptick. This is due to a spike in global metal prices, stemming from ongoing tariff wars and trade disputes.
The Union Bank report notes that higher input costs for metals, a result of supply chain disruptions, are likely to trickle into the prices of manufactured goods, keeping core inflation slightly elevated.
Looking Ahead: Risks Remain Despite Current Relief
The short-term inflation outlook appears stable, but risks persist. From April 2025 onward, food prices are projected to rise again due to seasonal factors, including increased demand and lower supply post-harvest.
Additionally, global trade tensions could worsen the situation if they lead to prolonged disruptions in supply chains or price shocks in key commodities like metals and oil.
“Global developments will need to be monitored closely. Trade tensions, tariff battles, and weather-related disruptions could all influence inflation trends going forward,” the report cautioned.
FAQs on WPI Inflation March 2025
Q1. What is the expected WPI inflation rate for March 2025?
WPI inflation is projected to ease to 2.1% year-on-year in March 2025, down from 2.4% in February.
Q2. What is causing the decline in WPI inflation?
The decline is mainly due to seasonal drops in food prices, especially vegetables, and lower fuel prices due to a global dip in crude oil rates.
Q3. Why is core WPI expected to rise slightly?
Core inflation may rise due to increased global metal prices, which are impacting the cost of manufacturing goods.
Q4. Which food items saw price increases in March 2025?
Edible oils rose by 1.3%, and sugar prices increased by 1% month-on-month in March.
Q5. Will WPI inflation continue to fall in the coming months?
Possibly not. Food prices are expected to rise from April due to seasonal trends, and global trade uncertainties may also impact inflation going forward.
For regular updates on macroeconomic trends and inflation analysis, stay tuned to Hindustan Herald.
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