Wholesale price inflation contracted the fifth straight month in August at (-) 0.52 per cent, though it rose sequentially from the previous month on account of the firming prices of food items, especially vegetables, onion and pulses.

The wholesale price index (WPI) based inflation rate has been negative since April and was (-)1.36 per cent in July. In August last year, WPI inflation was 12.48 per cent.

According to economists, fading base effects and elevated food inflation led to a (-)0.52 per cent WPI in August, which came in higher than July numbers. Inflation in food articles remained in double digit for the second straight month at 10.60 per cent in August, lower than 14.25 per cent in July.

Wholesale inflation in vegetables was 48.69 per cent in August, against 62.12 per cent in July. In pulses, inflation was 10.45 per cent, while in onion it skyrocketed to 31.42 per cent in August.

Fuel and power basket inflation was at (-) 6.03 per cent in August, against (-) 12.79 per cent in July. In manufactured products, inflation rate was (-)2.37 per cent against (-) 2.51 per cent in July.

Rajani Sinha, chief economist, CareEdge, said: “WPI contracted for the fifth straight month in August due to deflation in fuel and power and manufactured products categories whereas WPI food inflation remained in double digits. Sub-categories such as mineral oils, textiles, chemicals and metals remained in contractionary zone on an annual basis. However, some pressure was visible in fuel and power category with a sharp sequential rise in mineral oils and electricity prices.”

“With the support of high base fading, some uptick in WPI inflation could be seen in the second half,” she added.

Sunil Kumar Sinha, senior director and principal economist, India Ratings and Research, said “although the WPI points to benign input prices compared with last year, the latest data indicates a sequential build up in prices.”