Union Bank of India Projects Double-Digit Wholesale Inflation

Union Bank of India projects that India's wholesale price inflation will rise to 10.60 percent year-on-year in September, up from 9.92 percent in August. The bank expects wholesale inflation to remain in double digits in the near term and average around 10 percent for fiscal year 2027.

Rising vegetable prices, increased manufacturing costs, and climbing crude oil prices drive this trend. Fuel wholesale price inflation is projected to reach 24.45 percent, while core inflation is expected to hit 9 percent, making it the primary contributor to the headline figure.

The bank identifies several risks that could further pressure prices, including a Super El Niño, sluggish kharif crop sowing, rupee weakness, and geopolitical conflicts. Union Bank of India warns that the persistence of these elevated wholesale costs increases the possibility of transmission to retail prices as businesses pass higher input costs to consumers.