India's annual inflation accelerated to 9.44 percent in June, official data showed on Thursday, increasing pressure on the central bank to hike interest rates further. The rise in the benchmark wholesale price index - the government's most-watched cost-of-living barometer - was up from May's 9.06 percent, the commerce ministry reported.
June's figure was slightly below market forecasts of 9.7 percent but still well above the central bank's comfort level of between 5.0 and 6.0 percent. Inflation is one of the biggest headaches for India's Congress-led government, heaping misery on the nation's legions of poor, and is the highest among all major Asian economies. The central Reserve Bank of India has been among the most hawkish in the region, having increased key rates 10 times since March 2010. It is expected to raise them again at its next monetary policy meeting later this month despite signs the economy is losing steam.
"The central bank has made it quite clear it is prepared for lower growth in pursuit of lower inflation," Brian Jackson, senior emerging markets strategist at Royal Bank of Canada in Hong Kong, told AFP before the data was released. India's annual industrial output growth decelerated unexpectedly in May to 5.6 percent, its weakest pace in nine months, down from 8.5 percent in the same month a year ago, data earlier this week showed.
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