The Associated Press July 14, 2010, 5:51AM ET

India inflation rises to 10.6 percent in June

India's inflation rose to 10.6 percent in June as food and fuel prices continued to stay high, government figures showed Wednesday.

Surging inflation has caused the country's central bank to raise interest rates three times since March amid a rapid economic rebound from the global recession and been a growing headache for India's government. Earlier this month opposition political parties led a daylong protest strike across the country after the government hiked fuel prices, disrupting public transport and other services.

Food inflation in June rose 14.6 percent from a year earlier after a jump of 16.5 percent in May. Fuel and power inflation accelerated to 14.3 percent compared to 13.1 percent in May.

In late June, the government deregulated the price of gasoline resulting in a 6.7 percent, or 3.5 rupee ($0.08) per liter, price increase. The price of diesel -- used in farmers' irrigation pumps and tractors, as well as trains and buses -- was hiked by 5 percent, or 2 rupees ($0.04) a liter. Prices for kerosene prices rose by 33 percent, or 3 rupees ($0.06) a liter, the first increase since 2002.

Those increases are likely to be a factor in July's inflation data.

April's headline inflation figure was revised higher to 11.2 percent from 9.6 percent. May's provisional number was 10.2 percent.


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