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Wholesale Price Index( WPI)inflation in India is anticipated to stay suppressed at 0.5 percent for the remainder of the present fiscal year, according to a report launched by Union Bank of India.
The report highlighted that the WPI is most likely to remain in the favorable zone for the rest of FY26, supported by base impacts in the core index.
It predicted that the base result would continue to play an important function, considered that core WPI stood at -0.08 percent in September 2024.
“We estimate that the WPI is likely to remain in positive zone for the rest of the FY with our projection for FY26 WPI at 0.5 per cent as base effects in core will continue to play a crucial role,” the report kept in mind.
Regardless of the switch from unfavorable levels, WPI is anticipated to remain soft, presuming product rates stay steady and monsoon patterns stay beneficial.
The controlled WPI is likewise playing an essential function in keeping genuine production Gross Value Added (GVA) and general genuine GVA/GDP development raised by guaranteeing that the GDP deflator remains low.
The report even more stated that the benign inflationary outlook might provide area for financial policy reducing later on in the year.
“We maintain our view of a token 25-50bps rate cut(s) in H2-FY26, as our CPI inflation forecasts are trailing MPC’s projections by 30-50bps for the coming quarters (excluding GST impact), with a worsening growth outlook seen post frontload in Q1,” the report specified.
On the effect of Goods and Services Tax (GST) reforms, Union Bank of India approximated that inflation might increase by almost 130 basis points. It stated just a partial pass-through is anticipated, with the real effect most likely to be around 60 basis points, presuming anti-profiteering procedures stay in location.
The report pointed out that core WPI has actually been firming up for the 3rd successive month. Core inflation increased greatly to 2.01 percent in August from 1.20 percent in July, in spite of a low base of 0.56 percent in August 2024. This boost remained in line with the month-to-month gain of 0.47 percent on a consecutive basis.
The sharp uptick was driven by considerable boosts throughout a number of sectors. Minerals taped a significant dive from 0.09 percent month-on-month in July to 2.66 percent in August 2025. Produced sub-segments and non-food posts likewise signed up strong year-on-year spikes.
The report concluded that while WPI inflation will stay in favorable area through FY26, it will remain modest, assisting assistance development through beneficial rate characteristics.