Wholesale inflation falls for the second consecutive month, but vegetable prices are raising concerns

The common man has got relief from wholesale inflation for the second consecutive month. According to government data released on Tuesday, wholesale inflation declined for the second consecutive month in August to 1.31% due to cheaper fuel. Wholesale Price Index- WPI-based inflation was 2.04% in July. It was (-)0.46% in August last year.

The increase in the rate of inflation during this month is mainly due to an increase in the price of food products, manufacturing, textiles and machinery, etc," the Ministry of Industry said in a statement. According to the data, food inflation was 3.11% in August as against 3.45% in July. This was due to a fall in vegetable prices that fell 10.01% in August against 8.93% in July.

However, potato and onion inflation continued to rule high at 77.96% and 65.75% respectively in August. The fuel and power segment entered a deflationary zone with a contraction of 0.67% in August against inflation of 1.72% in July.

Data last week showed retail inflation was 3.65% in August because of high vegetable prices, higher than 3.60% the preceding month. The RBI mainly considers retail inflation while making decisions on monetary policy. It kept the benchmark interest rate or repo rate unchanged at 6.5% for the ninth month in a row in August.