India’s double-digit inflation inches higher

Officials from the CA Sri Lanka overseas chapters

NEW DELHI, July 14, 2010 (AFP) – India’s double-digit inflation edged higher in June, touching an annual rate of 10.55 percent, official data showed Wednesday, stoking pressure for another interest rate hike this month. April’s inflation reading was revised higher to 11.23 percent — a 19-month peak, the data showed.

But the central bank expects inflation to soften to 5.5 percent by the end of the financial year to March 2011, helped by expected plentiful monsoon rains, which should increase harvests and ease food prices.

The opposition has blamed Singh’s Congress-led government for failing to keep a check on prices since it was returned to power in elections last year. The inflation increase, which comes ahead of the central bank’s quarterly policy meeting on July 27, was mainly due to a rise late last month in fuel costs as well as an increase in food prices, the data showed.

The wholesale price index, India’s main cost-of-living measure, rose to 10.55 percent from a year earlier after a 10.16 percent increase in May.

High inflation is a lightning rod for political unhappiness in the country, where hundreds of millions of people live below the poverty line.

Prime Minister Manmohan Singh’s Econ

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