ID :
174807
Tue, 04/12/2011 - 10:32
Auther :

Global inflation to threaten Korean economy: Credit Suisse

SEOUL, April 12 (Yonhap) -- Mounting global inflationary pressure can pose a threat to South Korea's economy, but the country is expected to keep strong growth momentum, the Asian head of global bank Credit Suisse said Tuesday.
The world economy is facing a growing threat to its recovery from the fallout of the 2008 global financial crisis as spiraling oil and food prices raise fears that they may derail revivals of corporate earnings and consumer spending.
"Inflation is clearly a concern across the Asian region and also domestically; it's on everybody's mind," Osama Abbasi, CEO of Credit Suisse Asia Pacific, said in a group interview.
He was in Seoul to attend the Financial Supervisory Service (FSS)'s annual meeting with representatives of foreign financial companies operating here.
The Asia CEO, however, predicted that the world may not face further sharp acceleration in inflation, saying the Korean economy will likely continue to show strong growth this year despite the worry.
"Further acceleration from here is unlikely ... food price, which is a big component of inflation, is pretty much capped out," Abbasi said.
"For oil prices, there has been turbulence and may be more to come, but it is unlikely that any material events in the Middle East will take place that will send oil prices a lot higher," Abbasi said.
Despite the inflation worries, the domestic economy is well positioned to have powerful growth this year, Abbasi said, adding South Korea is the global firm's "biggest overweight country" among emerging countries.
His comments came after Korea's consumer prices posted 4.7 percent growth in March from a year earlier, surpassing for the third straight month the upper ceiling of the central bank's 2-4 percent inflation target for this year.
The Bank of Korea (BOK) held its benchmark interest rate at 3 percent earlier on Tuesday, following a quarter-percentage point rate increase in the previous month, aimed to fight accelerating price gains.
The CEO also said Asian countries may witness a continued inflow of foreign investment funds down the road, citing a poll of major global companies, government officials and academics.
A massive inflow of overseas stock funds helped the key local stock index, the Korea Composite Stock Price Index (KOSPI), to set a new record high of 2,130.43 on April 5.
pbr@yna.co.kr

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