Indian inflation hits six-month peak

NEW DELHI—India’s annual inflation rate accelerated to a six-month high, driven by rising food prices, data showed on Friday, with prices expected to increase further due to a fuel hike. Inflation climbed to a higher-than-expected 4.35 percent for the week ended February 9 from 4.07 percent the previous week, according to the wholesale price index, India’s most watched cost-of-living monitor. The rise surprised analysts who had forecast that inflation would be about 4.10 percent and ruled out any chances of any early monetary policy easing in Asia’s third-largest economy, economists said. It also came as unwelcome news for India’s Congress-led government which is worried about prices rising with just over a year to go before the next national election, analysts say. Inflation has been cited as a key factor in several recent state poll drubbings for Congress which largely owes its 2004 general election win to support from India’s poor masses who have been hardest hit by price rises. Prime Minister Manmohan Singh declared last week his government’s key priority is containing inflation which he called an “iniquitous tax” that “hurts the poor more than the rich.” Inflation is still far below its two-year high of 6.69 percent hit in January 2007.—Online