The report states that the uptick will be led by a hardening in the year-on-year (YoY) prints for global crude oil and commodity prices
After the wholesale price index (WPI) expectedly reverted to a year-on-year (YoY) inflation of 0.5 per cent in August 2025, Icra has stated that the headline WPI inflation is expected to rise further to a six-month high of around 0.9 per cent in September 2025.
In its report, Icra noted that the uptick will be led by a hardening in the YoY prints for global crude oil and commodity prices, as well as the depreciation in the USD/INR pair. An elevated base would likely pull the food index back to the deflationary territory in the month, the report emphasised.
“While expectations of a relatively more favourable consumer price index (CPI) inflation trajectory post the Goods and Services Tax (GST) rationalisation opens space for a rate cut by the Monetary Policy Committee (MPC), the positive impact of this on growth outcomes in the second half of the current financial year (H2FY26), along with the stronger-than-expected gross domestic product growth in Q1 is likely to result in a status quo in the upcoming October 2025 policy,” Icra highlighted in its report.
Icra explained that prices of vegetables and pulses weighed on the primary food articles segment in August, which pushed up the WPI-food index to the inflationary territory in the month. The report added that food prices increased by 1.2 per cent in August 2025 on a sequential basis, in contrast to the decline seen in August 2023-24.
The uptick in WPI inflation in August was driven by a broad-based increase across most segments, apart from fuel and power. The food segment exerted an upward pressure of 73 basis points (bps) on the headline print, followed by core-WPI.
On the other hand, Icra emphasised in its separate report that MPC is expected to deliver a status quo in October 2025 policy meet, given strong Q1FY26 GDP print. A dip in average monthly prices after the GST cut will begin to be reflected in October CPI print, which is estimated to cool to 1.5 per cent from around 2 per cent in September, as per the report.
