Nov. 22 (Bloomberg) -- Hong Kong's inflation rate may have climbed to a nine-year high of 2.7 percent in October as rents rose because the government resumed charging a property tax.

The median estimate of 12 economists surveyed by Bloomberg News compares with the 1.6 percent gain in September and would be the highest level since August 1998. The Census and Statistics Department will release the figure at 4.15 p.m.

Rising stock and property markets and falling borrowing costs are fueling spending, while the Hong Kong dollar's 5 percent fall versus China's yuan this year has pushed up import prices. The government restrained inflation from April to September by waiving the tax.

``Hong Kong's inflation will creep higher without the waiver,'' said Henry Li, an analyst at Core Pacific-Yamaichi International (Hong Kong) Ltd. ``Stock market gains have spilled over into property, with lower interest rates helping to push up rents and prices.''

The benchmark Hang Seng Index of shares has climbed 33 percent this year even after yesterday's 4.2 percent slide. The property sub-index has jumped 45 percent.

HSBC Holdings Plc, Standard Chartered Bank Plc, Bank of East Asia Ltd. and other lenders cut interest rates in September and this month. Changes in borrowing costs track moves by the U.S. Federal Reserve because Hong Kong's currency is pegged to the U.S. dollar.

Food, Oil Costs

Hong Kong's government this month raised its forecast for inflation this year to 2 percent from 1.5 percent, citing stronger domestic consumption, the weaker U.S. dollar, the appreciating Chinese yuan and higher food and oil prices.

The city imports most of its food from mainland China, where inflation accelerated to 6.5 percent in October, matching a decade high, as pork and vegetable prices surged.

After eliminating the effect of the tax break, consumer prices rose 2.7 percent in September from a year earlier, according to the statistics department. The government has pledged another waiver of the property charge in the first quarter of next year.

The following table shows economists' estimates for the percentage change in Hong Kong's consumer prices in October from a year earlier.

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Median                        2.7%
Average                       2.4%
High                          2.9%
Low                           1.7%
Number of Estimates             12
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Action Economics              2.8%
Bank of China (Hong Kong)     1.8%
Bank of East Asia             2.7%
Capital Economics             2.9%
CIMB-GK Research              1.8%
Forecast                      2.0%
Hang Seng Bank                2.8%
ING Groep                     1.9%
Lehman Brothers               2.6%
Standard Chartered            2.9%
Thomson                       1.7%
UBS                           2.8%
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To contact the reporter on this story: Nipa Piboontanasawat in Hong Kong at npiboontanas@bloomberg.net

Last Updated: November 21, 2007 11:00 EST