ICICI Bank’s research report says India’s wholesale price inflation (WPI) will stay high until FY27. The July 2026 WPI rose to 9.8% year‑on‑year, a sharp jump from the -0.8% recorded a year earlier. On a month‑to‑month basis, the index fell only 0.2%.
The easing in July was mainly due to lower fuel and power inflation, which dropped to 20% from 27.4% in June. Mineral oil prices fell to 32.4% from 46.5%, while LPG prices slipped 9.1% month‑on‑month. Prices of ATF and naphtha also eased.
However, global crude oil prices remain high, averaging USD 86.8 per barrel in FY27 compared with USD 69 in FY26. This could push WPI higher if oil prices stay elevated.
Primary article inflation climbed to 8.5% from 7% in June, reaching a 21‑month high. Non‑food article inflation surged to 17.7% from 11.1%, while food article inflation stayed at 5.4%. High inflation was noted in condiments, spices, eggs, meat, and fish.
Manufactured product inflation rose to 8.3%, the highest in 28 months. Inflation remained strong across chemicals, textiles, basic metals, rubber, plastics, electrical equipment, and fabricated metals. Food product inflation increased to 8.9%.
Producer price pressures stayed firm, with the output PPI unchanged at 9.6%, its highest level since April 2024.
ICICI Bank expects limited pass‑through from wholesale to consumer prices, keeping retail inflation relatively sticky. Consumer price inflation is projected to average 4.8% in FY27. A better monsoon and sowing outlook could help moderate food inflation in the second half of FY27.