The Reserve Bank of India has raised interest rates 11 times in 18 months but inflation remains at more than twice its comfort level, putting it in the awkward position of fighting high prices amid mounting worries about the health of the global economy.

The wholesale price index, India’s main inflation gauge, rose 9.78 percent in August, higher than the median forecast for a 9.6 percent rise in a Reuters poll and above the 9.22 percent recorded for July.

“Clearly, inflation is not easing as expected by the RBI despite its aggressive monetary stance, and some more time may be needed for the past policy actions to show effect,” said Arun Singh, senior economist at Dun & Bradstreet, who expects a 25 basis point rate hike on Friday and another thereafter.

While July industrial output data on Monday was the worst in nearly two years, adding to the argument against a rate increase, the central bank is still expected to raise rates by another 25 basis points at its mid-quarter review on Friday to combat inflation.

“This does clearly boost scope for the RBI to tighten policy rates by 25 basis points on Friday, though the trajectory thereon could hinge on intermittent inflation outlook, non-manufacturing WPI in particular,” said Radhika Rao, economist at Forecast PTE in Singapore.

India’s June-quarter growth of 7.7 percent was the weakest in six quarters, and RBI Gov. Duvvuri Subbarao has been under increasing pressure from officials in New Delhi to bring the current tightening cycle to a close.

Manufacturing inflation quickened to 7.79 percent in August from 7.49 percent in the previous month and its highest in three years, indicating that manufacturers still retain pricing power, although stalling domestic car sales show demand is slipping as rates rise.

Global and domestic economic conditions and sentiment have deteriorated markedly since Subbarao stunned investors in July with a 50 basis point rate increase, twice what was forecast .

While most analysts expect the central bank to raise the repo rate on Friday, expectations are not unanimous. Goldman Sachs, for one, still expects a pause.

India’s benchmark 10-year bond yield briefly eased 2 basis points to 8.31 percent while swap rates were little changed, as the data reaffirmed expectations for another rate increase. Stocks shrugged off early losses and closed 1.5 percent higher.

Rate hike or not, Subbarao is widely seen to be nearing the end of a tightening cycle that has made the RBI among the most aggressive central banks anywhere during the uneven global recovery from the financial crisis.

The RBI’s inflation comfort zone is 4 to 4.5 percent.

“The inflation figure is not something that anybody feels good about. The inflation situation now is uncomfortable and a matter of concern,” Kaushik Basu, chief economic adviser to the Finance Ministry, told reporters.

Persistently high prices have been a headache for the government of Prime Minister Manmohan Singh, which has been criticized for not pushing through fiscal measures and policy moves to bolster investment and address causes of supply-side inflation, including an inefficient farm sector.

Other Asian central banks have turned dovish as growth in the region weakens and global slowdown becomes more pronounced weighed down by debt problems in the US and the euro zone.

China’s central bank said on Monday that inflation, which fell in August from a three-year peak, was still high and it would maintain its policy settings.

Analysts say that stripping out the volatile capital goods sector, the index of industrial production (IIP) shows a picture of growth moderation in India, not collapse.

Demand for consumer goods is still holding up and growth in exports, though down from July levels, is still robust at around 44 percent while non-food credit growth at more than 20 percent is still above the targeted 18 percent.

The steady rise in rates has lifted the repo rate , India’s policy lending rate, to 8.00 percent.

However, weakening investment demand, industrial slowdown and bleak global conditions add downside risks to growth.

The falling rupee , trading close to its weakest in two years, could inflate imported price pressures and add to the case for a rate increase on Friday.