The annual inflation rate in February was 2.7 percent compared with 2.3 percent in January, official data showed Wednesday.

For the first two months of the year, the consumer price index rose 2.5 percent from a year earlier driven by food and housing, the Statistics Department said.

Malaysia's inflation rate is likely to rise in the first half of 2008 as the impact of high prices for commodities and food make their mark, the central bank said last month.

It has kept its key interest rate unchanged at 3.50 percent.

Inflation reached 3.6 percent last year due to high global oil prices.