The year-on-year (YoY) Wholesale Price Index (WPI) inflation eased marginally to 9.8% in July 2026 from 9.9% in June 2026 and slightly undershot ICRA’s estimate (+10.0%) for the month. The moderation was not broad-based and was entirely led by the fuel and power group, which exerted downward pressure to the tune of 88 bps to the headline print in July 2026 vis-à-vis June 2026. The WPI-food inflation rose to a 19-month high of 6.6% in July 2026 from 6.1% in June 2026, largely led by a broad-based uptick across manufactured food items and most primary food articles barring fruits and vegetables. Looking ahead, ICRA anticipates a larger easing in the WPI inflation to below 9.5% in August 2026, after peaking at 9.9% during May-June 2026. Nevertheless, prints are likely to remain elevated through much of the year, with an average WPI inflation forecast of around 8.5% for FY2027, feeding into a high nominal GDP growth figure as well.

• WPI inflation eased to 9.8% in July 2026: The slight moderation compared to 9.9% in June 2026 was not broad based and was entirely led by the fuel and power group, which eased to a four-month low of 20.0% in July 2026 from 27.4% in June 2026. This pulled down the headline print by 88 bps relative to June 2026, which was partly offset by the uptick in the other WPI groups. The core WPI inflation surged to a series-high of 8.2% from 7.5% in June 2026; the core index rose by 0.3% month-on-month (MoM) in July 2026 after cooling slightly in June 2026. Food inflation, on the other hand, hardened to a 19-month high of 6.6% in July 2026.
• Output PPI inflation was unchanged at 9.6% in July 2026: The Output Producer Price Index (OPPI) inflation remained unchanged at 9.6% in July 2026 similar to the level seen in the prior month, with the uptick in the inflation in agriculture and electricity segments being offset by the moderation in mining and manufacturing.