Mumbai: The annual rate of inflation based on the wholesale price index fell to a 16-month low at 3.79 per cent for the week ended August 25, from 3.94 per cent for the week ended August 18, aided by cheaper food products and some manufactured items.

The wholesale price index has remained below the 4-per cent mark for the second week in a row and is much lower than 5.27 per cent in the corresponding week of last year, raising expectations of a softening of the Reserve Bank''s monetary policy stance.

Inflation rate was even lower than the current figure during the week ended 29 April 2006, at 3.59 per cent.

RBI has projected inflation close to 5 per cent for the current fiscal and 4-4.5 per cent for the medium term.

Among essential items, prices of wheat, which is being imported by the government due to fall in the stock of public distribution system, fell by one per cent. Besides, prices of fruits, vegetables, maize and fish declined by one per cent.

However, prices of food products in manufactured items like gur rose by three per cent, while rice bran oil, gingelly oil and soyabean oil prices were up one per cent. Other commodities like sunflower were expensive by five per cent, while raw cotton rates shot up by three per cent.

Among manufactured items, prices of zinc declined by one per cent, while zinc ingot moved down by two per cent. Acids of all kind were cheaper by two per cent and carbon black by one per cent. However, cement prices firmed up by 0.2 per cent, pipes and tubes were up by one per cent, and ayurvedic medicine liquids by four per cent.

Inflation for the week ended June 30 figure was revised to 4.42 per cent against the provisional figure of 4.27 per cent as the wholesale price index finally stood at 212.8 points compared to provisional estimate of 212.5 points.

also see : General reports on Economy