According to a report by Union Bank of India, wholesale price index (WPI) inflation is expected to ease to 2.1% year-on-year in March 2025, down from 2.4% in February. This moderation is mainly attributed to a seasonal decline in food prices, particularly in the vegetable segment, which dropped 4% month-on-month. However, not all food items followed the same trend, with edible oil and sugar prices rising by 1.3% and 1% respectively, which may push up prices of manufactured food products.
The report also noted that the fuel WPI is expected to decline in March due to a drop in global crude oil prices, contributing to the overall moderation in WPI inflation. However, core WPI, which excludes food and fuel, may see a slight uptick in March due to a spike in global metal prices caused by ongoing tariff wars and trade disruptions.
Despite the cooling in WPI, the report warns that global developments, including trade tensions, need to be closely monitored as they could impact global supply chains and future price trends. Additionally, food prices are expected to rise again from April onward due to seasonal factors, which may impact inflation going forward. Overall, while the WPI is expected to ease slightly in March, risks remain due to global metal price pressures and potential disruptions from trade-related tensions.