Capital Market conducted the poll amongst economists for their projections of inflation figure for September 2025. As per the results of poll, the inflation rate is projected to remain flat at 0.6% in September 2025. Economists in the poll have projected WPI inflation in the range of 0.5-0.7% for September 2025. The median of the economists forecast for inflation of September 2025 stood at 0.6%, while the average also stood at 0.6%.

CPI Inflation: September 2025

The all-India general CPI inflation declined to 1.54% in September 2025 (new base 2012=100), compared with 2.07% in August 2025. The corresponding provisional inflation rate for rural area was 1.07% and urban area 2.04% in September 2025 as against 1.69% and 2.47% in August 2025.

The core CPI inflation increased to 4.58% in September 2025 compared with 4.21% in August 2025. The cumulative CPI inflation has eased to 2.35% in April-September FY2026 compared with 4.38% in April-September FY2025.

Among the CPI components, inflation of food and beverages declined to (-) 1.37% in September 2025 from 0.05% in August 2025. Within the food items, the inflation for vegetables declined to (-) 21.38%, oils and fats 18.34%, cereals and products 2.06%, fruits 9.93% and pulses and products (-) 15.32%. Further, the inflation for milk and products eased to 2.51%, prepared meals, snacks, sweets etc. 4.12%, non-alcoholic beverages 4.06%, egg 2.76%. However, the inflation for meat and fish increased to 2.15%, spices (-) 3.07% and sugar and confectionery 3.95% in September 2025.

The inflation for housing increased to 3.98%, while that for miscellaneous items rose to 5.35% in September 2025. Within the miscellaneous items, the inflation for personal care and effects increased to 19.39%, while the inflation for transport and communication declined to 1.82%, education 3.44%, household goods and services 2.37%, health 4.34% and recreation and amusement 1.97% in September 2025.

The inflation for clothing and footwear declined to 2.28%, while the CPI inflation of fuel and light eased to 1.98% in September 2025.

WPI Inflation: August 2025

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, retuned back to positive zone at 0.5% in August 2025 after remaining in sub-zero level for past two months. Among three major sub-groups, inflation for primary articles and manufactured products group increased contributing to the overall increase in inflation, while inflation declined for fuel and power group in August 2025. The core inflation (manufactured products excluding foods products) moved up to 1.6% in August 2025 from 1.1% July 2025.

The WPI inflation is revised downwards to (-) 0.19% for June 2025 from (-) 0.13% reported at provisional level.

Inflation of primary articles rose to (-) 2.1% in August 2025 from (-) 5.0% in July 2025. Further, manufactured products inflation moved up to 2.5% in August 2025 from 2.0% in July 2025. However, the inflation for fuel and power group inflation eased to (-) 3.2% from (-) 2.4% in July 2025.

Inflation of food items (food articles and food products) increased to 0.2% in August 2025 from (-) 2.1% in July 2025. Meanwhile, inflation of non-food items (all commodities excluding food items) increased to 0.6% in August 2025 from 0.1% in July 2025.

The contribution of primary articles to the overall inflation of 0.5% rose to (-) 60 basis points (bps) in August 2025, from contribution of (-) 143 bps to (-) 0.6% inflation in July 2025. The contribution of fuel product group fell to (-) 40 bps against (-) 30 bps in July 2025, while that of manufactured products rose to 150 bps in August 2025 from 120 bps in July 2025.

The contribution of food items (food articles and food products) to inflation of 0.5% in August 2025 increased to 6 bps from (-) 66 bps to (-) 0.6% in July 2025.Meanwhile, the contribution of non-food items (all commodities excluding food items) gained to 43 bps in August 2025 from 10 bps in July 2025.

FAO Food Price Index: September 2025

The benchmark of world food commodity prices declined slightly in September, led by drops in the sugar and dairy price indices, according to the Food and Agriculture Organization of the United Nations (FAO) Friday. The FAO Food Price Index declined to 128.8 points in September 129.7 points in August. The September reading represents a 3.4% increase from a year ago.

The FAO Cereal Price Index declined by 0.6% from August. International wheat prices decreased for the third consecutive month amid subdued international demand and confirmation of large harvests in key producing countries. World maize prices also dropped, amid forecasts of abundant supplies as well as the temporary suspension of grain export taxes in Argentina. The FAO All Rice Price Index fell by 0.5% as reduced purchase orders by buyers in the Philippines and Africa weighed on the market.

The FAO Vegetable Oil Price Index decreased by 0.7% in September, as lower palm and soybean oil quotations – partly reflecting robust stocks of the former in Malaysia and elevated exportable supplies of the latter from Argentina - more than offset increases in sunflower and rapeseed oil prices.

The FAO Meat Price Index, by contrast, increased by 0.7% from its revised August level and reached a new record high, up 6.6% from a year earlier. The rise reflected higher world bovine and ovine meat prices, while pig and poultry meat quotations remained broadly stable. Bovine meat prices climbed to an all-time high, supported by strong demand in the United States of America, where limited domestic supplies and favourable price differential continued to encourage imports.

The FAO Dairy Price Index declined by 2.6% in September. World butter quotations fell by 7.0%, partly reflecting waning demand for ice cream in the Northern Hemisphere and higher production prospects in Oceania. Milk powder quotations decreased mainly on softer demand from key importers and firmer export competition. Cheese prices declined only marginally.

The FAO Sugar Price Index declined by 4.1% from August to reach its lowest level since March 2021. The drop was driven by higher-than-expected sugar production in Brazil and favourable harvest prospects in India and Thailand, following ample monsoon rains and expanded plantings.

Outlook

The WPI inflation rebounded to positive zone after remaining in sub-zero level for last two months, while the CPI inflation also increased in August 2025 from eight year low in July 2025. Benign inflation conditions during 2025-26 so far have been primarily driven by a sharp decline in food inflation from its peak of October 2024. Inflation within the fuel group moved in a narrow range of 2.4-2.7% during June-August. Core inflation remained largely contained at 4.2% in August. Excluding precious metals, core inflation was at 3.0% in August. The healthy south-west monsoon, higher kharif sowing, adequate reservoir levels and comfortable buffer stock of foodgrains is expected keep food prices benign. The recently implemented GST rate rationalisation would lead to a reduction in prices of several items in the CPI basket. The RBI expects inflation outcome to be softer than what was projected in the August MPC resolution, primarily on account of the GST rate cuts and benign food prices. Despite the anticipation of moderate momentum during H2, large unfavourable base effects are likely to exert upward pressure on inflation, especially in Q4.