Soaring Inflation surpasses 12% in India

by Sanjay Jha | August 8, 2008 at 01:36 am

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Despite all the stringent measures like the rate hikes there seems to be no let up in the inflation. And now the looming inflationary pressures are threatening companies' growth prospects. Indian Government had taken several measures to contain inflation but it has not paid. Although prices are expected to rise further in the short term, India's central bank believes the slowing global economy and the falling oil price will eventually impact on inflation, bringing it down below 10% next spring.

Inflation has risen above 12% in India despite government efforts to tighten monetary policy.
Annual consumer prices rose by 12.01% in the week ending 26 July, a fresh 13-year high, up from 11.98% the week before - according to official figures.
Successive interest rate rises in recent months have done little to quell inflation, driven higher by escalating food and commodity prices.
Economists warned inflation would rise further before easing next year.
'Apprehension'
Double-digit inflation poses a threat to India's rapid economic progress with government fuel subsidies - designed to cushion people from the impact of rising prices - putting increased pressure on public finances.