India’s inflation rate surges above 10% mark

| June 14, 2010 | 0 Comments

There continues to be ongoing concerns of high inflation in Asia’s third largest economy after figures today revealed India’s wholesale inflation rate rose to 10.16% in May, up from 9.59% the previous month.

The wholesale price index rate, which represents the highest since 2008, is the central bank’s most closely watched gauge of inflation and exceeded analysts expectations of a 9.60% rise.

The rate has been pushed up by soaring food and fuel costs but the Government has said prices will start to fall soon.

The figures have raised the prospect that the central bank, the Reserve Bank of India (RBI), will raise interest rates again.

The RBI has hiked interest rates in the last couple of months in order to combat inflation.

Meanwhile, in other news, India has reported its fastest growth in manufacturing in at least 15 years in April.

Manufacturing growth jumped 19.4% - matching the growth seen in December 2009, which represented the highest since April 1995.

Meanwhile, figures also revealed India’s industrial output grew at a much stronger-than-expected rate in April, rising 17.6% in April compared with a year ago.

In related news, the Indian economy continues to perform strongly after figures at the end of last month showed annualised growth of 8.6% in the three months to March.

The economy for the year ending March 2010 grew by 7.4% – slightly exceeding the RBI‘s forecast of 7.2%.

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