- * Food price index up 16.44 pct vs 15.46 week ago
* Fuel price index up 10.73 pct vs 11.48 week ago
* Aug consumer price index up 9.88 pct vs 11.25 pct in July
* Cbank seen lifting key rate by 25 bps by end-December (Adds fiscal deficit, CPI, analyst quote)
By Matthias Williams
NEW DELHI, Sept 30 (Reuters) - India's annual food price inflation continued to quicken in mid-September as heavy rains disrupted supplies and analysts see another rate hike by the year end as the central bank acts to stamp down high inflation.
The Reserve Bank of India (RBI) has said emerging macroeconomic conditions, especially prices, would determine its future action, with five rate hikes since mid-March having brought monetary conditions close to normal.
The surge is also a political concern for the ruling Congress party, which faces key state elections this year and next. With a third of the world's poor living in India, the country had seen governments being voted out over high food prices.
Food makes up around 14 percent of the wholesale price index (WPI), the most watched price gauge in India. Policymakers had expected the good summer harvest to slow price rises.
The RBI projects headline inflation INWPI=ECI to ease to 6 percent by March, when the current financial year ends, from 8.5 percent in August, but noted in its September policy review that food prices continued to contribute to inflationary pressures.
"We don't expect food inflation to ease substantially before the kharif (winter harvested) crop comes into the market," said Indranil Pan, chief economist at Kotak Mahindra Bank.
The central bank last raised its repo rate, at which it lends to banks, on Sept. 16 by 25 basis points to 6 percent. Analysts expect another quarter-point rise by the year end.
Data on Thursday showed the food price index in the year to Sept. 18 rose 16.44 percent, compared with 15.46 percent in the previous week, on higher prices of pulses, onions and vegetables.
It was the second straight rise under a new data series -- with a different base year of 2004-05, new components and weightings -- under which readings began in the week to Sept. 4.
Separate data showed the consumer price index (CPI) for industrial workers rose 9.88 percent in August, slower than July's 11.25 percent increase. The CPI component basket has a higher proportion of food items than the WPI basket
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