Mumbai: The annual rate of inflation based on the wholesale price index (WPI) is likely to touch 5.5 per cent – the upper limit of the Reserve Bank''s projection of 5-5.5 per cent for this fiscal – during the week ended June 24, according to experts.

"Inflation is likely to be 5.4-5.5 per cent," said P K Choudhury of credit rating agency ICRA. PNB Gilts Sunita Gupta also said inflation would be around 5.5 per cent as the base is low.

The recent sharp increase in the prices of essential commodities along with the hikes in the prices of petrol and diesel has made inflation a hot topic.

As inflation surged to 5.44 per cent during the week ended June 17, the government allowed duty-free imports of pulses and sugar while drastically slashing customs duty on wheat imports to 5 per cent from 50 per cent. The government also suspended export of pulses until Diwali, which falls in October.

The RBI, meanwhile, hiked the short-term interest rates by 0.25 per cent last month and promised more action to contain prices.

Ahead of the release of crucial weekly data on inflation, the government also said it was vigilant and open to taking more policy measures to check price rise.

"The government is vigilant and has taken steps. Let us hope inflation will remain under control," chief economic adviser Ashok Lahiri said.

On the interest rates scenario, he said, "Wait for a decision by the US Federal Reserves on interest rates tomorrow."

"The world will take cue from it," he said but added the interest rates have already hardened the world over.