New Delhi, 15 July 2008. India's inflation rate has grown from 8.75% at the end of May to 11.89% at the end of June, a 35.9% increase.
The Reserve Bank of India (RBI) had set a target for Whole Price Index inflation to be 4.1% in 2008, but currentl levels are almost three times that amount. Government economic advisors expect inflation to stay in double digits into 2009.
Analysts are now worried that the RBI will get more aggressive in fighting inflation, and will further raise the short term or overnight borrowing rate.
The rate was hiked twice in June, the first increases in a year and a half, and now stands at 8.5%, its highest level since 2000.