South Korea’s consumer prices crawled up in July after months of hovering below or around zero as fresh food prices jumped from the lengthy heat wave, while consumption remained subdued despite the coronavirus relief handouts.

The benchmark consumer price index (CPI) in July was 104.86, up 0.3 percent from the same month a year earlier but unchanged from the previous month, Statistics Korea said Tuesday.

Inflation improved to 1 percent earlier this year but sank back to near zero in April amid the coronavirus outbreak. It fell 0.3 percent in May and remained flat in June.

The early heat wave drove up prices of agricultural, livestock and fishery products by 8.4 percent in July from a year ago, contributing the most to the month`s headline inflation.

Industrial product prices slipped 0.4 percent on year, extending the falls of previous months. Petroleum prices especially plunged 10.2 percent due to weak global oil prices. Utility prices dropped 4.5 percent.

Service costs in July inched up 0.2 percent from the same month a year ago. Public service costs fell 1.9 percent due to the government’s expansion of free education, but this was offset by a 0.6 percent rise in dining-out prices.

Ahn Hyung-joon, a Statistics Korea official, attributed the weak inflation to the virus-triggered global oil price slump, Korea’s lowering of city gas prices, and the sluggish services sector from continued social distancing measures.

Core inflation, which excludes volatile agricultural product and oil prices, gained 0.7 percent in July, up from last month’s 0.6 percent. The CPI without food and energy, the standard by the Organization for Economic Cooperation and Development (OECD), rose 0.4 percent compared with a 0.2 percent increase in June.

By Kim Hyo-jin

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