India's annual inflation accelerated a faster-than-forecast 9.06 percent in May, official data showed on Tuesday, increasing pressure on the central bank to raise interest rates further. The rise in the wholesale price index - the government's preferred measure of the cost of living - was much higher than April's provisional 8.66 percent, the ministry of commerce said. Economists had forecast inflation in May to be 8.70 percent.
Finance Minister Pranab Mukherjee said that core inflation, excluding food, fuel and power price rises, showed no sign of easing. "This poses some concerns, which will have to be addressed," he told reporters. Soaring prices are one of the biggest problems for India's government and inflation is the highest among all major Asian economies. India's central bank, the Reserve Bank of India (RBI), has been among the most hawkish in the region, having increased key interest rates nine times in the past 16 months.
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