New Delhi

Wholesale price-based inflation inched up to 9.92 per cent in August from 9.78 per cent in July, mainly due to rising prices of food, fuel and manufactured items, government data showed on Monday.

The August inflation print is the second highest in the new WPI series with 2022-23 as the base year.

Economists said the recent rebound in global energy prices amid the re-escalation in West Asia will continue to exert upward pressure on WPI and the output producer price index (OPPI).

The inflation based on producer prices rose 9.81 per cent in August against 9.6 per cent in July.

"Across groups, mineral oils (containing petroleum products), food articles, manufacture of food products, manufacture of basic metals, non-food articles, and manufacture of chemicals and chemical products have been major drivers of WPI inflation in August 2026," the Commerce and Industry Ministry said while releasing the WPI data.

In August, food inflation rose to 7.05 per cent from 6.65 per cent in July. In manufactured items, WPI inflation stood at a series high of 8.37 per cent compared to 8.29 per cent in July.

In the fuel and power basket, wholesale price index (WPI)-based inflation was 22.93 per cent in August against 20.05 per cent in July.

Barclays, in a research note, said the resurgence in fuel and power inflation was led by rises in mineral oils and natural gas & petroleum WPIs (due to an increase in international energy prices).

The rise in 'manufactured products' inflation mostly reflected increases in the primary articles: in the manufacture of food products, and derivatives of petroleum products: chemicals, and rubber & plastics, along with the manufacture of motor vehicles.

"The recent rebound in global energy prices amid the re-escalation in the Middle East will continue to exert upward pressure on WPI and OPPI. Resultantly, we no longer expect any meaningful moderation in the upcoming inflation prints," Barclays said.

India Ratings and Research Chief Economist Devendra Pant said the prolonged West Asia crisis has reversed two months’ declining trend in fuel and power inflation and is likely to remain elevated until the crisis is resolved.

"With the West Asia crisis remaining unresolved (similar to Russia-Ukraine), global uncertainty is likely to remain elevated in the near term. This, along with deficient rain and weaker currency, would continue to push inflation higher in the near term," Pant said.

Ind-Ra expects wholesale inflation to increase to 10.2 per cent in September 2026 and likely remain elevated in the rest of 2026, unless a permanent solution to the West Asia crisis is achieved.

Icra Principal Economist Rahul Agrawal said food inflation is expected to harden further in September-October 2026 on the back of an unfavourable base, as well as the stronger-than-usual sequential hardening in prices of some food items such as sugar, which could sour sentiment during the festive season.

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"The rise in global commodity prices is likely to keep fuel and core-WPI prints elevated in the near term, which would exert pressure on the headline WPI inflation over the next few months. We expect WPI inflation to exceed 9.5-10 per cent in September-October 2026, before cooling thereafter, aided by a favourable base, unless global energy and commodity prices rise further from the current levels," Agrawal said.