India's inflation accelerated unexpectedly in April, limiting the scope for the central bank to reduce interest rates further to aid the slowing economy.

The Ministry of Commerce and Industry said Monday that inflation, measured by the wholesale price index, accelerated to 7.23 percent in April from 6.89 percent in March. Economists had expected a slowdown to 6.64 percent.

A year ago, the rate of inflation was 9.74 percent. Build up inflation in the financial year so far was 2.07 percent compared to 1.74 percent in the corresponding period of the previous year.

In April, the price index for primary articles rose 9.71 percent year-on-year, while there was a 10.49 percent jump in food prices. Prices of fuel and power rose 11.03 percent from a year earlier.

Last month, the Reserve Bank of India slashed the interest rate by half percentage point, while signaling that inflation limits the scope for further such actions.

Suggesting a slowdown in overall economic activity, India's Industrial output declined 3.5 percent annually in March, reversing February's 4.1 percent gain.

RTTNews