Page last updated at 15:57 GMT, Friday, 22 February 2008

Food prices spur Indian inflation

New Delhi market
Rising food prices could tip inflation over the central bank's target rate

Inflation in India rose more than expected in early February to a six month high on rising food prices.

The wholesale price index hit 4.35% for the year up to 9 February, as the price of vegetables, fruit and lentils rose.

Economists expect inflation to head higher still as last week's rise in fuel prices starts to take effect.

Inflation remains below the Indian central bank's target rate of 5% but economists say it could breach that level in the near future.

"The numbers are definitely higher than expectations,

"With the fuel price hike showing up in headline numbers from next week, inflation seems to be on an uptrend and may reach the 5 percent mark very soon," said A. Parana, economist at ICICI Securities in Mumbai.

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