India wholesale inflation rate rises to 11%, a new 13-year high

This article belongs to the India inflation watch story arc.

news.bbc.co.uk :

Indian inflation has risen to a new 13-year high. Rising fuel and food costs drove the wholesale price index to rise to 11% in the 12 months to 7 June [2008], up from the previous week's 8.75% and the highest since 1995. India calculates inflation on the wholesale price of a basket of 435 basic goods - actual consumer prices are much higher. More interest rate rises are now expected but there are concerns they will not do anything to curb rising energy prices. India recently cut fuel subsidies and raise petrol and diesel prices by about 10%, sparking protests in many parts of the country. India imports nearly 75% of its crude oil requirements.

- And with this, India's inflation rate has now gone into double-digit territory. In fact, the rate of change has been such that the inflation rate had crossed the 5% mark just 3 months earlier, back in Mar 2008. So, do you have any further doubt that inflation is winning in the inflation versus deflation debate? No? Good. Like I said earlier, India could be one of the leading candidates to take us down the path of global hyperinflation, right behind Venezuela and Vietnam. Inflation is taking off worldwide, and if nothing is done to change the way things are going, chances are it is going exponential.

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