NEW DELHI - India's inflation raced to a fresh 13-year peak, official data showed Thursday, amid worries that a major wage hike announced for government employees could push it even higher. Annual inflation jumped to 12.44 percent for the week ended August 2, from 12.01 percent for the week ended July 26, according to the Wholesale Price Index, India's most-watched cost-of-living monitor. The inflation rise exceeded analysts' expectations of around 12.2 percent, with the central bank's end-of-year target of seven percent driven by higher fruit and fuel prices and some manufactured goods. Inflation has nearly tripled from its level of just 4.39 percent a year ago and stands at its highest level since the current inflation series began being compiled 13 years ago. The inflation increase was announced late Thursday after Prime Minister Manmohan Singh's cabinet gave the nod to an average 21 percent salary increase for five million government employees. Analysts said the civil service pay increase would pump more money into the economy, fuelling inflation, and give the central bank scant option but to hike interest rates again. The Reserve Bank of India has raised rates three times since June in a continuation of an aggressive tightening policy that began in 2004 and has slowed growth in Asia's third-largest economy. Late last month the bank hiked its key short-term lending rate by a bigger-than-expected half-a-percentage point to nine percent " a seven-year high. On Thursday, the prime minister's Economic Advisory Council forecast inflation could reach 13 percent in the near term. But some private economists have said it could hit 15 percent. The council warned that high inflation in tandem with the global economic downturn could slow India's growth to 7.7 percent in the financial year to March 2009, its weakest performance in four years. Panel chairman C. Rangarajan said that inflation "could be brought down to eight to nine percent by March 2009 through coordinated policy action" and that a "tight monetary stance needs to be maintained" until prices ease. However, even eight or nine percent is too high for the ruling Congress-led coalition, which desperately wants to control prices. It fears a backlash in national elections due by May 2009 from the nation's poor masses, who have been hardest hit by price rises.