India’s Wholesale Inflation Projected at 0.5% for FY26: Report

Swift summary

• Wholesale Price Index (WPI) Inflation forecast: Union Bank of india’s report projects WPI inflation to stay subdued at 0.5% for FY26, driven by base effects in the core index.
• Core WPI Trends: Core WPI rose for the third consecutive month,reaching 2.01% in August compared to 1.20% in July, with sizable increases across minerals and non-food manufactured goods.
• Impact on Economic Growth: A modest WPI supports elevated real Gross Value added (GVA) and GDP growth by keeping the GDP deflator low.
• Monetary Policy Outlook: Benign inflation may allow space for monetary easing later this year; token rate cuts of 25-50 basis points are expected.
• GST Reform Consequences: GST reforms could increase inflation by approximately 130 basis points but with partial pass-through resulting in an estimated impact of around 60 basis points due to anti-profiteering measures.

!Read More