Wholesale price inflation softens to 4.53% in August

After a dip in retail price rise, country's wholesale price inflation in August came down to 4.53% backed by a decline in food and vegetable prices. In July, the rate of the Wholesale Price Index (WPI) inflation was 5.09%.

While food prices declined to (-) 4.04% in August, vegetable prices declined (-) 20%, the government data showed on Friday. But price rise in potato continued at close to 72%. Onion witnessed deflation of about 27% and fruits over 16%. Prices of pulses, too, continued to decline over 14% in August.

However, in the fuel and power segment, there was a double-digit inflation. Fuel and power saw inflation rising to 17.73%.

The major contributor was domestic cooking gas or LPG with its prices rising over 46% in the month of August. The prices of petrol went up by over 16% in the month under review and that of diesel by nearly 20%. The rate of inflation in crude oil was more than 53%.

The ease in wholesale prices came on the back of a softening consumer price inflation. Easing inflation may prompt the Reserve Bank of India to hike interest rates once again to support the weakening rupee.

The RBI had hiked policy interest rates by 25 basis points for the second consecutive month in August. The next policy review is due in early October.