Wholesale price inflation surged to a two-and-a-half year high in January, driven by higher fuel prices and pointing to lurking prices pressures, which may prompt the RBI to sit pat on interest rates.
Inflation measured by the wholesale price index rose an annual 5.25% in January, higher than previous month's 3.39% and decline of 1.1% in January 2016.
The government revised upwards the inflation reading for November to 3.38% from the previous 3.15%, highlighting build-up of price pressures. Acceleration in WPI in January was powered by 18.14% increase in the fuel and power index.
Separate data showed that retail inflation had slowed to five-year low of 3.17% in January.
Economists said they expect the WPI to settle in the 4-4.5% range by March.