Korea’s CPI up 1.9% in April on rise in petroleum and service fees

2017.05.02 13:58:47 | 2017.05.02 16:19:58

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South Korea’s consumer prices gained 1.9 percent in April on year to keep up the strengthening streak of around 2 percent for the fourth straight month due to rises in petroleum and services prices.

According to data released by Statistics Korea Tuesday, the nation’s consumer price index (CPI) rose 1.9 percent last month from a year earlier. The annualized inflation rate hovered around 2 percent since January after staying below 1.5 percent throughout last year.

The rise in the headline index during the recent months was largely due to rebound in oil prices. The petroleum-related prices edged up 11.7 percent to bump up the overall CPI by 0.48 percentage point. Gasoline prices jumped 9.5 percent while prices of liquefied petroleum gas for automobiles and diesel surged 17.7 percent and 14.1 percent, respectively.

The hike in petroleum-related prices sent manufactured goods prices up 1.5 percent.

Service prices climbed 2.2 percent and hoisted up the headline index by 1.21 percentage points. Prices for jeonse, Korea’s traditional rent contract where tenants pay lump-sum deposit for usually two years, rose 3.1 percent from same period last year and insurance premiums shot up 19.5 percent.

Prices of agricultural, livestock and fishery products eased with year-on-year grow slowing to 4.5 percent from 5.8 percent in the previous month. Livestock prices jumped 8.7 percent while vegetables price contracted 6.0 percent.

The index for everyday expenses reflecting spending for staple food and utility fees accelerated 2.5 percent faster than the headline inflation rate, suggesting burden on monthly household budget.

The fresh food index that includes vegetables, fruits and fish eased to a 4.7 percent gain from 7.5 percent in the previous month as vegetables prices fell 9.5 percent on month. But egg prices kept strong due to tight supply as the result of the worst-ever outbreak of avian flu that wrecked the poultry industry while demand has expanded with the start of school season, said a Statistics Korea official.

The core inflation excluding oil and farm produces gained 1.3 percent in April against a year-ago period. The CPI minus food and energy prices, the standard by the Organization for Economic Cooperation and Development (OECD), increased 1.5 percent.

By Kim Se-woong

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