India’s May inflation hit 10.2 per cent, more interest rate hikes possible

The Associated Press ~ staff The News
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MUMBAI, India — India’s headline inflation accelerated to 10.2 per cent in May over last year, the government said Monday, raising the possibility of further interest rate hikes in Asia’s third-largest economy.

Food inflation remained a stubbornly high 16.5 per cent in May, the Ministry of Commerce said. Fuel and power inflation came in at 13.1 per cent and manufacturing inflation — a key measure for central bank policymakers — was 6.4 per cent, slightly off April’s 6.7 per cent.

April inflation was 9.6 per cent.

Inflation is quickly becoming a political issue in India, where opposition groups have staged protests over runaway food prices.

The ruling Congress Party coalition would also like to push through a controversial measure to eliminate costly fuel subsidies, but rising prices have made that politically difficult.

India’s industrial output has enjoyed double-digit growth for seven-straight months, as strong investment activity returns Asia’s third-largest economy to pre-crisis levels of growth.

Organizations: Ministry of Commerce, Congress Party coalition

Geographic location: India, Asia, MUMBAI

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