Wholesale inflation hits four-month high in August, rises to rose to 3.24%

India’s wholesale price inflation rose to 3.24% from a year ago, its fastest pace in four months, driven by higher prices of food and fuel products, data showed.

The rise compares with a 3.0% increase forecast by economists in a Reuters poll and a provisional 1.88% rise in July.

Wholesale food prices in August rose 4.41% on year, compared with a 2.12% rise a month earlier, government data showed on Thursday.

Meanwhile, the retail inflation (consumer price index or CPI-based inflation) rose to a 5-month high of 3.36% in August, up from 2.36% in the previous month, mostly on expected lines. Food inflation has turned positive. Within the food category, vegetables saw prices rising at the rate of 6.16%, against a price fall of 1.67% in July, though tomato prices tumbled. The core inflation jumped to 4.6%, which reflects the impact of the goods and services tax roll out.

As the prices of petrol and diesel steadily rise, freight rates have seen a direct increase. The revision in HRA of central government employees is likely to push up housing inflation further. Analysts are of the opinion that the CPI inflation is expected to harden further in September, led by food and beverages, transport, communication and housing. It may cross the Reserve Bank of India's (RBI) comfort zone of 4% by November.

(with inputs from Reuters)