Inflation News

The Wholesale Price Index (WPI) based inflation stood at 1.81 per cent in January 2026 compared to the corresponding month of the previous year, indicating a positive rate of inflation during the month.    

The government had formed an expert group to measure CPI accurately, with the changing consumption behaviour of the households and to incorporate latest global best practices including methodological developments.

The increase in headline inflation and food inflation during December 2025 is mainly attributed to an increase in inflation of personal care and effects, vegetables, meat and fish, egg, spices, and pulses, according to an official statement.

HSBC Global Investment Research said in its report that “we do not forecast more RBI repo rate cuts, but the risks, if any, are of more easing, if growth disappoints”.

WPI-based inflation was (-) 1.21 per cent in the previous month of October and 2.16 per cent in November last year.

Retail inflation stood at just 0.7 per cent in November 2025, a sharp fall from 5.5 per cent recorded in November last year.

Core inflation excluding gold — a better indicator for measuring demand-side price pressures and assessing the impact of goods and services tax (GST) rationalisation — eased slightly again in November (2.5 per cent compared to 2.6 per cent). It was helped by the continuing pass-through of lower GST rates on mass consumption goods, said the report.

The outlook comes amid India's wholesale inflation easing to its lowest level in over two years.  

The Bank's 2025-26 WPI forecast is currently tracking below 0.35 per cent amid what are being stated as subdued global commodity prices and a seasonal decline in food prices (with the impact of floods on food inflation seen to be capped).

The declining trend in food prices continued in October as food inflation fell deeper in the negative zone at (-) 5.02 per cent from (-) 2.28 per cent in September. Food inflation has now continued to stay negative for the fifth consecutive month, bringing welcome relief to household budgets.

Prices of potatoes too have seen a sustained decline in the last seven months. In October, retail prices of potato declined by 31.3 per cent. The CPI weighted trajectory for TOP in September based on retail prices have fallen on an aggregate basis by -29.5 per cent.

The Pakistan government projected inflation to remain between 5 per cent and 6 per cent in October, but later admitted that flood damage and blocked trade routes with Afghanistan have increased the prices of essential goods.

There is the use of the Geometric Mean (GM) in place of the Arithmetic Mean (AM), as GM moderates the volatility in prices and use of the latest classification of individual consumption according to purpose, in line with the Classification of Individual Consumption by Purpose (COICOP)-2018.

Strong cereal production, well stocked granaries, lower oil prices and cheaper exports from China are likely to keep inflation lower for longer, HSBC Global Research said in the report.

The month-over-month change in WPI for August stood at 0.52 per cent, as compared to July, when the WPI inflation fell to a two-year low of (-) 0.58 per cent this year, compared to the same month of the previous year, primarily due to a decrease in the prices of food articles.

Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory well.

CPI inflation increased to 2.07 per cent in August, up from 1.61 per cent in July, remaining significantly lower than the 3.7 per cent reported a year ago. Food prices continued to decline for the third consecutive month, decreasing 0.7 per cent year-on-year, primarily due to lower costs for vegetables, pulses, and spices. 

The food inflation for agricultural and rural labourers entered the negative zone at -1.56 per cent and -1.13 per cent respectively, as prices of food items fell during the month due to increased production.

The provisional annual inflation rate based on the Wholesale Price Index (WPI) eased to (-) 0.58 per cent in July compared to the same month previous year, led by a sharp drop in the prices of food articles and crude petroleum.

The WPI inflation for July is also lower than the -0.13 per cent that was recorded in the previous month of June. WPI-based inflation has been steadily easing since March and hit a 14-month low of 0.39 per cent in May.