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MADRID: Spain's annual inflation rate surged to a two-year high of 3.4 per cent in February, grim news for an anaemic, jobs-scarce economy, preliminary data showed Monday.
Higher fuel, food and soft drink prices pushed inflation to its highest level since October 2008 when fuel prices were soaring, according to the National Statistics Institute estimate.
Inflation was at 3.0 per cent in January this year.
The Spanish economy slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of the once-booming property market.
The economy shrank 0.1 per cent in 2010 and the unemployment rate ended the year at 20.33 per cent, the highest level in the Organisation for Economic Cooperation and Development (OECD).
For 2011, the government is forecasting economic growth of 1.3 per cent, showing greater optimism than the International Monetary Fund, which predicts growth of just 0.6 per cent.
Prime Minister Jose Luis Rodriguez Zapatero said early this year that inflation was a worry but he anticipated an easing in the months ahead as oil prices declined.
But political upheaval in north Africa and the Middle East in past weeks has sent oil prices soaring back to levels last seen in mid-2008, stoking fears that they will push rising inflation even higher.
-AFP/ac
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