August 2025 WPI inflation rebounds to 0.52% in sync with CPI

17 Sep 2025 , 11:18 AM

AUGUST 2025 WPI INFLATION REBOUNDS TO +0.52%

After falling for 7 consecutive months between December 2024 and July 2025; WPI inflation bucked the trend to rebound to +0.52% in August 2025. WPI inflation had been in negative zone in June and July. The rebound in WPI inflation in August is in sync with consumer inflation, which had touched a 97-month low in July 2025. In terms of revisions; Jun WPI inflation eased by 6 bps from -0.13% to -0.19%. The spike in WPI inflation can be partially attributed to base effect as WPI inflation fell from 2.10% to 1.25% in the year-ago period.

Month	WPI Inflation (%)	CPI Inflation (%)
Aug-24	1.25%	3.65%
Sep-24	1.91%	5.49%
Oct-24	2.75%	6.21%
Nov-24	2.16%	5.48%
Dec-24	2.57%	5.22%
Jan-25	2.51%	4.26%
Feb-25	2.45%	3.61%
Mar-25	2.25%	3.34%
Apr-25	0.85%	3.16%
May-25	0.13%	2.82%
Jun-25	-0.19%	2.10%
Jul-25	-0.58%	1.61%
Aug-25	+0.52%	+2.07%

Data Source: Office of the Economic Advisor

Let us look at how WPI and CPI inflation measure against the last 12 months rolling averages? In the case of WPI inflation, the average of the last 12 rolling months is 1.51%, so the current month WPI inflation is comfortably lower at 0.52%. For CPI inflation, the average of the last 12 rolling months was 3.91%, and the 2.07% reading is also well below that. In WPI Inflation, Manufacturing basket had a big impact due to its 64.23% weight. In August 2025, manufacturing inflation was sharply higher at 2.55%, compared to 2.05% in July.

WPI INFLATION SHIFTS: YOY AND MOM

Let us first look at how the WPI inflation basket across primary products, fuel & power, and manufacturing; shifted YOY in last 3 months.

Commodity Set	Weight	Aug-25 WPI	Jul-25 WPI	Jun-25 WPI
Primary Articles	0.2262	-2.10%	-4.95%	-3.22%
Fuel & Power	0.1315	-3.17%	-2.43%	-3.13%
Manufactured Products	0.6423	2.55%	2.05%	1.90%
WPI Inflation	1.0000	0.52%	-0.58%	-0.19%
Food Basket	0.2438	0.21%	-2.15%	-0.26%

Data Source: Office of the Economic Advisor

While the fuel & power basket went deeper into deflation zone, the rebound came from food and manufacturing WPI. Manufacturing WPI has bounced due to supply chain issues. Food spike has been driven by oils, fats, and vegetables. Now for high frequency MOM data.

Commodity Set	Weight	Aug-25 WPI	Jul-25 WPI	Jun-25 WPI
Primary Articles	0.2262	1.60%	1.02%	0.70%
Fuel & Power	0.1315	-0.69%	1.62%	-0.42%
Manufactured Products	0.6423	0.21%	-0.07%	-0.21%
WPI Inflation	1.0000	0.52%	0.46%	0.00%
Food Basket	0.2438	1.15%	0.58%	0.16%

Data Source: Office of the Economic Advisor

The short-term high frequency trend had given a warning of rebound in July itself, and August has only corroborated that trend. The WPI inflation could have been higher, had it not been for the sobering impact of Russian crude oil on the fuel basket.

WPI BASKET – BIG SWING FACTORS IN AUGUST 2025

Swing factor are drivers that trigger the shift in WPI; both positive and negative.

Commodity	WPI Inflation	Commodity	WPI Inflation
Vegetable Oil	22.92%	Onions	-50.46%
Oil Seeds	13.94%	Potatoes	-44.11%
Food Products	7.15%	Pulses	-14.85%
Wheat	4.75%	Vegetables	-14.18%
Cement, Lime, Plaster	4.23%	Crude Petroleum	-13.68%
Minerals	3.30%	Crude Oil & Natural Gas	-9.87%
Non-metallic Minerals	3.00%	Petrol	-5.72%
Milk	2.58%	Fruits	-4.86%
Leather Products	2.40%	High Speed Diesel (HSD)	-3.54%
Tobacco Products	2.22%	Cereals	-3.06%

Data Source: Office of the Economic Advisor

Let us look at upward pressure on WPI inflation in August 2025. Out of the top 10 items pushing WPI inflation up, 5 are from food basket and 5 from the manufacturing basket. What about the downward pressure on WPI? There are 6 products from the food basket 4 from energy basket. The WPI boosters and pressure points are fairly evident.

The news on the WPI inflation front is mixed. The sharp rebound is in sync with consumer inflation; hence it is not clear if it is just base effect or there is more to it. It could be that the global trade constraints are putting pressure, in which case, there will be cost escalations for Indian corporates. RBI will keep that in mind in formulating its next MPC policy in October!