New Delhi: Wholesale inflation fell to a four-month low of 1.31 percent in August due to cheaper vegetables, food items and fuel. However, onion and potato prices remained high. Wholesale Price Index (WPI) based inflation has declined for the second consecutive month, while it had reached a high of 3.43 percent in May. It fell by 2.04 percent in July and 0.46 percent in August, 2023.

Talking about retail inflation, it was 3.65 percent in August due to rising prices of vegetables. This is more than 3.60 percent in July. RBI mainly takes retail inflation into account while formulating monetary policy. In the monetary policy review of August, RBI kept the policy rate unchanged at 6.5 percent for the ninth consecutive time.

According to the Ministry of Industry, 'Prices of food items, processed food products, other manufacturing, textile manufacturing and manufacturing of machinery and equipment etc. increased in August 2024.' According to the data, inflation in food items stood at 3.11 percent in August, while it was 3.45 percent in July. Vegetable prices declined by 10.01 percent in August. Inflation in potatoes and onions remained high at 77.96 percent and 65.75 percent respectively in August.

According to financial services company Barclays, 'The reason for the softening of the wholesale price index in August is the gradual decline in food (vegetable) prices. Barclays has also said that the risk of impact on core consumer price inflation has reduced due to the reduction in manufacturing costs due to the fall in energy and metal prices. Inflation in manufactured products stood at 1.22 percent in August. Inflation in the fuel and electricity category stood at 0.67 percent in August as against 1.72 percent in July.