South Korea’s consumer prices climbed 0.7 percent in December from a year earlier, rising at the fastest pace in six months.
The country’s consumer price index (CPI) in December was 105.12, adding 0.7 percent from the same month a year ago, Statistics Korea said Tuesday.
Korea’s inflation has remained stuck below 1 percent since January, the longest stay in zero territory since data releases began in 1965, fueling concerns of a looming deflation. In September, consumer prices dipped 0.4 percent to mark the country’s first-ever negative inflation reading. Prices remained flat in October and inched up a mere 0.2 percent in November.
The inflation rate for the full year was 0.4 percent, the lowest annual reading on record but in line with the Bank of Korea’s estimate. Previous lows had been 0.7 percent in 2015 and 0.8 percent in 1999 in the wake of the Asian financial crisis.
The central bank delivered two interest cuts in 2019 and ended the year by choosing to stay pat at a record low 1.25 percent. The next rate-setting meeting is scheduled for Jan. 17, 2020.
The CPI without food and energy, the standard by the Organization for Economic Cooperation and Development (OECD), rose 0.6 percent on year in December compared with 0.5 percent in the previous month. Core inflation, excluding volatile agricultural product and oil prices, added 0.7 percent versus last month’s 0.6 percent.
Fresh food prices in December fell 0.8 percent on year, easing from the 3.8 percent drop in October and 2.7 percent slide in November. Prices of industrial goods rose 1.1 percent after months of decline. Utility prices rose 1.5 percent and service charges added 0.7 percent, similar to previous months.
Statistics Korea said prices remained low compared with last year’s price surge in agricultural products and petroleum goods, though the base effect was starting to wear off. Government policies including free high school education and extended health care coverage also helped to push down costs, it added.
By Kim Hyo-jin
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]