Diverging from the trend in retail prices, wholesale price index (WPI)-based inflation eased to a four-month low of 3.58 per cent in December as vegetables became cheaper although fuel costs rose sharply.

WPI inflation was 3.93 per cent in November and much lower at 2.10 per cent in November 2016.

In contrast, retail inflation soared to a 17-month high of 5.21 per cent in December as food items became more expensive.Similarly, the rate of inflation in the WPI Food Index also eased to 2.91 per cent in December from 4.1 per cent in November, according to official data released on Monday.

WPI inflation in food articles cooled to 4.72 per cent from 6.06 per cent in November. Vegetable prices also eased to 56.46 per cent in December compared with 59.80 per cent in the previous month.

Inflation in protein-rich eggs, meat and fish cooled to 1.67 per cent in December, while that in fruits spiked to 11.99 per cent. However, wholesale prices of onions soared 197.05 per cent in December, while fruits became costlier by 11.99 per cent.

Meanwhile wholesale inflation in the fuel and power segment rose to 9.16 per cent in December from 8.82 per cent in the previous month. WPI inflation in manufactured items remained constant at 2.61 per cent.

Data released last week showed that retail inflation breached the RBI’s comfort level to touch 5.21 per cent in December due to rise in the prices of food items, especially vegetables. The Reserve Bank takes into account the retail inflation while deciding on key policy rates.

In its last policy review in December, the RBI had kept key interest rate unchanged. It has raised inflation forecast for remainder of the current financial year to 4.3-4.7 per cent on account of global crude oil prices and implementation of the 7th Pay Commission recommendations.

Meanwhile, inflation for October has been revised upwards to 3.68 per cent from the provisional estimate of 3.59 per cent released earlier.

(With inputs from PTI)