New Delhi: India’s wholesale inflation fell to a four-month low of 4.53 per cent in August on softening of food prices.

The retail inflation too in August had fallen  to 10 months low of 3.69 per cent, as per data released earlier.

The fall in wholesale and retail inflation should bring relief to  the Modi government battling opposition attack over high fuel prices.

The effect of rising petrol and diesel prices has been neutralised by deflation in food articles, which resulted a lower wholesale price index (WPI) inflation for August.  The WPI-based inflation stood at 5.09 per cent in July and 3.24 per cent in August last year.

“The decline in the WPI inflation in August 2018 was largely in line with forecasts, driven primarily by the deepening disinflation in food items, particularly perishables like vegetables and fruits, as well as some easing in the inflation for primary non food articles, minerals and fuels,” said Aditi Nayar, principal  economist, ICRA.

However, she said that core inflation hardened to a series high five per cent in August 2018 from 4.8 per cent in July 2018, a signal that firms with pricing power are beginning to transmit the weaker rupee and rising costs associated with industrial inputs such as fuels, to final prices.

“As expected, the disinflation in food items worsened in August 2018, given the unseasonably slack momentum in prices of various perishable items,” said Ms Nayar.