Capital Market conducted the poll amongst economists for their projections of inflation figure for June 2025. As per the results of poll, the inflation rate is projected to rise to 0.8% in June 2025. Economists in the poll have projected WPI inflation in the range of 0.77-0.80% for June 2025. The median of the economists forecast for inflation of June 2025stood at 0.8%, while the average also stood at 0.8%.

WPI Inflation: May 2025

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, declined to lowest level in last 14-months at 0.4% in May 2025 from 0.9% in April 2025. Inflation for all the three major sub-groups - primary articles, fuel and power group and manufactured products group declined contributing to the overall dip in inflation in May 2025. The core inflation (manufactured products excluding foods products) dipped to 0.9% in May 2025 from 1.2% April 2025. The WPI inflation is revised upwards to 2.25% for March 2025 from 2.05% reported at provisional level.

Inflation of primary articles declined to (-) 2.0% in May 2025 from (-) 1.4% in April 2025. The inflation for fuel and power group inflation eased to (-) 2.3% from (-) 2.2% in April 2025. Further, manufactured products inflation also slipped to 2.0% in May 2025 from 2.6% in April 2025.

Inflation of food items (food articles and food products) fell to 1.7% in May 2025 from 2.5% in April 2025. Meanwhile, inflation of non-food items (all commodities excluding food items) declined to (-) 0.1% in May 2025 from 0.1% in April 2025.

The contribution of primary articles to the overall inflation of 0.4% declined to (-) 56 basis points (bps) in May 2025, from contribution of (-) 40 bps to 0.9% inflation in April 2025. The contribution of fuel product group fell to (-) 29 bps against (-) 28 bps in April 2025, while that of manufactured products declined to 121 bps in May 2025 from 155 bps in April 2025.

The contribution of food items (food articles and food products) to inflation of 0.4% in May 2025 fell to 51 bps from 75 bps to 0.9% in April 2025. Meanwhile, the contribution of non-food items (all commodities excluding food items) dipped to (-) 10 bps in May 2025 from 9 bps in April 2025.

FAO Food Price Index: June2025

The FAO Food Price Index, a benchmark for world food commodity prices rose 0.5% in June 2025 from May 2025. Although international prices of cereals and sugar fell, these declines were outweighed by higher prices for dairy products, meat and vegetable oils. The index was 5.8% higher compared to its level a year earlier but remained well below its peak in March 2022.

The FAO Cereal Price Index fell by 1.5% in June from the previous month. World maize prices declined sharply for the second month amid abundant supplies from Argentina and Brazil. Prices of sorghum and barley also decreased. Wheat prices, by contrast, increased due to weather-related concerns in parts of the European Union (EU), the Russian Federation and the United States of America (USA). International rice prices dipped slightly, primarily for Indica varieties, reflecting softer demand.

The FAO Vegetable Oil Price Index rose by 2.3% from May, led by gains in palm, soy and rapeseed oils. International palm oil prices climbed nearly 5% on strong global demand. Soy oil prices also rose in June driven by expectations of higher biofuel demand in Brazil and the USA, as well as higher soybean prices in South America amid firm international demand. Rapeseed oil prices also rose amid tight global supply outlooks, while sunflower oil prices eased on improved production prospects in the Black Sea region.

The FAO Meat Price Index increased by 2.1% in June, reaching a new all-time high. World prices of bovine, pig and ovine meats all rose, while poultry meat prices continued to fall.

The FAO Dairy Price Index rose by 0.5% in June compared to the previous month, with butter prices reaching a new record high amid tight supplies in Oceania and the EU, coupled with continued strong demand from Asia. Cheese prices increased for the third consecutive month, while the prices of skim and whole milk powders declined due to subdued global demand and ample supplies.

The FAO Sugar Price Index was down 5.2% from May, marking its fourth consecutive monthly decline and reaching its lowest level since April 2021. The decrease reflects improved production outlooks in Brazil, India and Thailand, where favourable weather and expanded plantings should result in higher outputs.

Outlook

The WPI inflation has declined sharply to 0.4%, while the CPI inflation has also slipped to more than six-year low of 2.8% in May 2025. The inflation has moderated driven by softening of prices for food items. The core inflation which is more sticky has also shown moderation. The inflation is expected to be well under control for next two-three quarters. The strong monsoon rainfall and pick up in kharif crop sowing augurs well for maintaining food price inflation under control. The weather-related uncertainties and still evolving tariff related concerns with impact on global commodity prices is a cause of concern for inflation.