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S.Korea's consumer price growth accelerates to 2.1 pct in Oct.

11-01-2012 10:11 BJT

SEOUL, Nov. 1 (Xinhua) -- South Korea's consumer price growth accelerated to 2.1 percent last month, staying in the 2 percent range for two months in a row, due to a rise in food prices, data by the statistical agency showed Thursday.

Consumer prices advanced 2.1 percent in October from a year before, up from a 2.0 percent gain tallied in the previous month, according to Statistics Korea. From a month earlier, the prices were down 0.1 percent.

The country's consumer price inflation stayed in the 2 percent range for four months through June before falling to this year's low of 1.2 percent in August. The inflation accelerated to the 2 percent level in September and October, but it stayed below the midpoint of Bank of Korea (BOK)'s inflation target band of 2- 4 percent for eight straight months.

The still low level of inflation was expected to allow the BOK room to ease its monetary policy further. The central bank cut its policy rate by 25 basis points (bps) to 2.75 percent at the October rate-setting meeting following the unexpected rate cut in July.

Market watchers predicted the faster consumer price inflation due to price hike in farm goods. "A jump in food inflation has pushed up overall inflation in Korea. Inflation is likely to remain within target because core inflation remains low and the economy is growing below potential," Moody's Analytics said in a report before the data release.

Core consumer prices, which exclude volatile agricultural and oil product prices, gained 1.5 percent on-year in October, up from a 1.4 percent rise in the previous month. The OECD-method core CPI, excluding food and energy prices, rose 1.4 percent last month, unchanged from the prior month.

The fresh food price index, a gauge of fruits and vegetables, surged 12 percent in October from a year earlier, up from an 8.6 percent gain in the prior month. The surge was attributable to a low base effect as the fresh food prices plunged 10.1 percent in October 2011.

Prices for agricultural, livestock and fishery products climbed 5.9 percent on-year in October, up from a 4.1 percent rise in September. Livestock prices fell 3.4 percent last month, but prices for agricultural and fishery products jumped 11.4 percent and 1.5 percent each.

Manufactured product prices gained 2.2 percent on-year in October, down from a 2.5 percent gain in September due to stable movement in prices for global grain and oil prices. Processed food prices climbed 3.4 percent last month, and petroleum product prices advanced 2.1 percent.

Prices for electricity, water and gas advanced 3.7 percent on- year in October, down from a 5.9 percent gain for September. Service sector prices rose 1.4 percent in October from a year earlier, staying the stable level due to the persistent policy effect. The South Korean government was offering subsidies for school meals and childcare fees, sending the private service prices to remain at the low level.

Public service prices rose 1.1 percent on-year in October, with private service charges advancing 0.7 percent last month. The price hike in the housing rental services stood at 3.5 percent last month, down from 3.8 percent for September.

 

Editor:James |Source: Xinhua

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