NEW DELHI, Dec 14: India’s annual inflation rate jumped unexpectedly nearly three-quarters of a point to 3.75 per cent on rising fuel and food prices, official data on Friday showed.

Inflation rose to 3.75 per cent for the week ended December 1 from 3.01 per cent the previous week, according to the wholesale price index, India’s most watched cost-of-living monitor.The rise was driven by a 16 per cent hike in aviation fuel, price hikes in other fuels as well as smaller increases in some food items.

Annual inflation stood at 5.56 per cent a year ago.

Inflation has fluctuated in recent weeks but is still well below the central bank’s target of close to five per cent for the fiscal year to March 31, 2008.

“Although there is no hike in domestic fuel prices, the inflation is expected to rise in coming months due to a continuous rise in money supply which is currently at above 23 per cent,” India’s Institute of Economic Growth said in a report.

The central bank held its short-term lending repo rate steady at 7.75pc in October, citing excess money supply that fuels inflation, and global energy costs.—AFP