South Korean inflation surges to 27-month high

| March 2, 2011 | 0 Comments
South Korean inflation surges to 27-month high

Statistics Korea has today announced the inflation rate has jumped to a 27-month high - driven by higher food and fuel costs.

According to Statistics Korea, the consumer price index rose by 4.5% in February on an annual basis.

The rate is now at the higher end of the central bank’s 2%-4% target.

Analysts believe the latest figures will lead the central bank to lift interest rates. Last month, the central bank elected to keep interest rates on hold despite rising inflation.

The move surprised analysts who had expected a further rate rise after January’s increase to 2.75%.

However, analysts expect rates will be lifted this month, with many predicting rates to be between 3.5% and 3.75% by the end of 2011.

Inflationary pressures are rife in Asia and many central banks have opted to hike interest rates in an attempt to combat soaring prices.

In the last few weeks, central banks in China, Indonesia and India have all increased interest rates.

Tags: , , consumer price index, , , pressures, , , Statistics Korea,

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