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New Delhi: India's annual inflation rate headed towards eight per cent in early May, clocking a fresh three-year high, but analysts said it was unlikely to provoke more monetary steps for now as growth was showing signs of a slowdown.
The wholesale price inflation rate, India's most widely watched measure, rose 7.83 per cent in the 12 months to May 3, higher than previous week's 7.61 per cent and above a median forecast of 7.5 per cent in a Reuters poll.
The surprise jump, stemming from higher prices of industrial fuel, metal products and some food items, comes after a series of measures by the government and the central bank to calm price pressures in Asia's third-largest economy.
"I think pressures will persist in coming weeks and will prevail above seven per cent for the next three to four months," said D.K. Joshi, principal econ-omist at domestic ratings agency Crisil in Mumbai.
"It's a Catch-22 situation as they [central bank] have to manage slowing growth and rising inflation. It's a tough task."
The 10-year bond yield rose two basis points after the data to 7.88 per cent and the partially convertible rupee weakened to 42.73/74 per dollar from 42.64/65.
Analysts expect the inflation rate to remain elevated and say it could climb to 8 per cent in coming weeks.
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