Wholesale inflation at 4-month low of 1.31% in Aug

PTI, New Delhi: Wholesale inflation fell to a 4-month low of 1.31% in August due to a decline in prices of vegetables and fuel, even though onion and potato prices spiked, according to official data released on Tuesday. Wholesale price indexbased inflation fell for the second straight month in August after it hit a high of 3.43% in May. Inflation in July was 2.04 per cent. In August last year, WPI inflation was (-) 0.46 per cent. "Positive rate of inflation in August 2024 is primarily due to an increase in prices of food articles, processed food products, other manufacturing, manufacture of textiles and manufacture of machinery & equipment, etc.," the Commerce and Industry Ministry said in a statement. Inflation in food items was 3.11% in August against 3.45% in July.

This was led by declining prices of vegetables, which dropped 10.01% in August. Inflation in potatoes and onions continued to be high at 77.96% and 65.75%, respectively, in August. Barclays in a note said the slowing in August WPI was driven by a sequential decline in food (vegetable) prices. The continued climb in non-perishable food prices needs to be watched. ICRA Senior Economist Rahul Agrawal said while Kharif sowing has been healthy so far, the surplus rainfall in the ongoing month can potentially delay the Kharif harvesting and/ or impact such yields, even as reasonably healthy reservoir storage at the pan-India level is likely to boost the sowing of rabi crops. "The WPI inflation eased to a four-month low of 1.3% in August 2024, with the fuel and power, core (non-food manufacturing), and crude petroleum and natural gas sub-groups together pulling down the headline WPI print by as much as 70 bps in the month vis- -vis July 2024," Agrawal said.