Declining prices of vegetable and other food articles pulled down wholesale inflation sharply to 3.74% in August to a nearly five-year low. The inflation measured on Wholesale Price Index (WPI) was at 5.19% in July and 6.99% in August 2013.

Inflation in the food segment witnessed a significant decline to 5.15% in August as against 8.43% in the previous month, according to official data released here today. The August WPI inflation is the lowest since October 2009 when it stood at 1.8%. Vegetable prices contracted 4.88%, the third continuous month of decline.

Maintaining a downward trend, the onion prices contracted by 44.7 % during the month under review. However, potato prices were on the rise as inflation in the kitchen essential jumped to 61.61% from 46.41% in July. Inflation in the fruits basket eased to 20.31% in August. While prices of protein rich items like egg, meat and fish contracted during the month, inflation in milk and pulses inched up to 12.18% and 7.81%, respectively, as compared to July. The August retail inflation too eased to 7.8% compared to 7.96% in July.

The wholesale WPI data further revealed that the price rise in manufactured goods, like sugar and edible oils too eased to 3.45% in August, while it was 3.67% in July. Inflation in the fuel and power segment which include LPG, petrol and diesel declined to 4.54% as compared to price rise of 7.40% seen in July. Meanwhile, wholesale inflation based on final index for June has been revised upwards to 5.66% from the provisional estimate of 5.43%. The August WPI data is also provisional, the government said. It also said the build up inflation rate in the financial year till August is 3% compared to a build up rate of 5.23% in the same period of 2013-14.