Inflation to hit 13-yr high at 9.82 per cent

Annual inflation rate is expected to have jumped to 13-year highs near 10 per cent in early June, powered by a fuel price rise, a poll showed on Wednesday.

The wholesale price index is forecast to have risen to 9.82 per cent in the 12 months to June 7, which would be the highest since June 3, 1995, when annual inflation was at 9.89 per cent.

The forecasts from 12 analysts ranged widely from 9.63 per cent to 10.62 per cent, and compared with an annual rise of 8.75 percent in the previous week.

Four economists in the poll estimated the data, due around noon on Friday, to come in at above 10 percent, its first double-digit reading since May 27, 1995.

It would be the 17th consecutive week that inflation rate has been above 5.5 per cent, the central bank's target by the end of the fiscal year in March 2009.

India had raised state-set fuel prices by about 10 percent on June 4, and the RBI last week raised its key lending rate for the first time in more than a year to contain inflation expectations.

India's chief statistician, Pronab Sen, told Reuters on Tuesday that headline inflation would hit double digits sometime in the coming weeks and was likely to hover around 8 to 9 per cent before declining in the last quarter of 2008.

The wholesale price index is more closely watched than the consumer price index (CPI) because it includes more products and is also published weekly.