Inflation rose to 8.75%

The annual inflation rate increased to a seven-year high of 8.75 per cent for the week ended May 31, up from 8.24 per cent in the previous week. The inflation is at the highest level since February 2001.The WPI for manufactured products was up by 0.7 per cent, while for primary articles it was up by 0.9 per cent. The inflation figures seem to go up further. Inflation numbers in India come in with a lag of around two weeks. The impingement of the oil price hike on June 5 would get reflected in the data released on June 20, 2008.

Economist Suchita Mehta from Standard Chartered said that inflation is likely to cross 10% in next few weeks. According to an NDTV poll, the inflation rate for the week ended May 31 was expected at 8.32 per cent. Inflation for week ended April 5 revised to 7.71 per cent. Hence the ruling party is under pressure now!