The inflation is going out of control in India, the second fastest growing economy of the world in 2009. The inflation data released by the Government authorities yesterday indicated a massive 8.5% rise in overall inflation during the month of January 2010.
This is expected to result in further tightening of the bank interest rates, which in turn could stifle the economic activity. So expect further drop in foreign investments into this country till global pictures improve.
Already the retail level spike up in many of the food articles has been running at over 30% in the last four months. The annual monsoon rains failed in the middle of 2009, which resulted in reduced food production.