SEOUL, Aug 10 (Reuters) - A South Korean government think-tank revised its annual inflation projection upwards on Thursday, citing the recent rise in energy prices, although it said the need for interest rate hikes has lessened.
The forecast compares with the government and the central bank's inflation estimates of 3.3% and 3.5%, respectively.
"While the economic sluggishness eased and the labour market continued a solid trend, a slowdown in inflation reduced the need for interest rate hikes," the KDI said in a statement.
On growth, KDI kept its forecast unchanged at 1.5% for this year, higher than the government and the central bank's 1.4%.
Risk factors to its growth forecast include sluggish growth in China, continued monetary tightening in major economies on higher inflation, and weaker domestic demand on smaller fiscal spending due to limited tax revenues, the KDI added.
Persons:
KDI, Jihoon Lee, Muralikumar
Organizations:
Korea Development Institute, The Bank of Korea, Thomson
Locations:
SEOUL, China