Korea’s CPI up 1.9% in June due to strong fresh food prices

2017.07.04 13:02:39 | 2017.07.04 13:48:13

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South Korea’s consumer prices softened slightly in June, but nevertheless kept near the inflation target of 2 percent for the sixth straight month because of strengthening in the supply end of oil and fresh food.

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

Inflation accelerated far above the economic growth rate due to price spike in fresh food from unseasonable climate and imported fuel.

Fresh food index soared 10.5 percent in June from a year earlier. Prices of fresh fruits jumped 21.4 percent, the biggest gain since March 2011 amid lengthy drought.

Prices of agricultural, livestock and fishery products climbed 7.6 percent and dragged up the headline index by 0.59 percent. It is the biggest year-on-year gain since 8.5 percent of January. Egg prices soared 69.3 percent due to renewed concerns over bird flu, squid 62.6 percent, potatoes 35.6 percent, and watermelon 27.3 percent on year.

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Petroleum-related prices rose 2.8 percent on year, softening from earlier gains.

Prices of liquefied gas for motor vehicles and city gas jumped 10.6 percent and 10.1 percent, respectively. Gasoline price inched up 1.6 percent and diesel price 2.2 percent.

Service charges gained 2.3 percent from a year earlier, but in the lowest year-on-year gain since December 2015. Insurance fees jumped 19.5 percent.

When excluding volatile oil and farm produces, the core inflation gained a modest 1.4 percent in June from a year ago. The CPI without food and energy, the standard by the Organization for Economic Cooperation and Development (OECD), was up 1.5 percent.

Supply-stoked inflation won’t likely soften in coming months as utility fees would likely jump from a year-ago in July-September due to temporary cuts last year amid poor economy and due to continued dry season, according to the office.

By Kim Gyu-sik

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