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.