S. Korea’s inflation keeps up nine-year strong pace of 2.6% in August

2021.09.02 11:34:33 | 2021.09.02 11:56:03

[Photo by Lee Chung-woo]이미지 확대

[Photo by Lee Chung-woo]

South Korea’s inflation in August kept up strengthening above the mid-2 percent level on continual rise in food and commodity prices.

According to Statistics Korea on Thursday, the country’s consumer price index (CPI) added 2.6 percent from a year ago to 108.29 in August.

The headline inflation has picked up pace to above 2 percent in April and further to 2.6 percent, a level untouched for the last nine years, in May. After a brief easing to 2.4 percent, the gain accelerated back to 2.6 percent in July and again in August, the longest period of inflation above the target 2 percent since January-May in 2017.

The central bank last week raised inflation estimate for this year to 2.1 percent from earlier 1.8 percent. The bank lifted the base rate from a record low of 0.50 percent to 0.75 percent in August and signaled further tightening to tame inflation and debt rise.

Food and commodity prices were primarily blamed for inflationary pressure.

Farm, livestock, and fisheries prices gained 7.8 percent on year and 3.9 percent on month due to sizzling heat wave.

Prices of eggs jumped 54.6 percent, stretching double digits for the eighth month in a row after 15.2 percent in January. Prices of pork also soared 11 percent, Korean beef 7.5 percent, watermelons 38.1 percent, spinach 35.5 percent, and chili powder 26.1 percent.

Prices of industrial goods increased 3.2 percent, marking the steepest gain since 3.5 percent in May 2012. Prices of oil soared 21.6 percent, including diesel 23.5 percent and gasoline 20.8 percent, on rising raw materials cost that led to a surge in processed food prices.

Prices of industrial goods stayed below zero territory from April last year to February this year before adding above 2 percent from April.

Electricity, water, and gas prices were up 0.1 percent.

Prices of public service fell 0.7 percent while individual service added 2.7 percent. Dining costs rose 2.8 percent.

In individual service sector, prices of insurance service were up 9.6 percent and housing management fee 5.3 percent.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]