South Korea inflation quickens in February on supply-side pressures
SEOUL (Reuters) -South Korea’s consumer inflation accelerated in February and beat expectations due to supply-side pressures after three months of easing, official data showed on Wednesday.
The consumer price index (CPI) rose 3.1% in February from the same month the year before, compared with a rise of 2.8% in January and a gain of 2.9% tipped in a Reuters poll of economists.
On a monthly basis, consumer prices rose 0.5%, after rising 0.4% in the previous month. It was the fastest jump since September, according to Statistics Korea.
By product, prices of agricultural products climbed 5.7% over the month, leading the index higher, while petroleum products rose 2.5%.
Policymakers have said inflation could be volatile in February and March but is expected to continue stabilising afterwards.
“The inflation trend is expected to slow, unless there is a sharp rise in oil prices, due to weak demand-side pressure, but the trend could be bumpy rather than smooth, with living costs, such as agricultural products, remaining at high levels for some time,” the Bank of Korea (BOK) said after the data release.
Finance minister Choi Sang-mok said the government would make efforts to bring down inflation below 3%, with measures to stabilise prices of agricultural products and by closely monitoring oil prices.
The BOK last month held interest rates steady for a ninth straight meeting, while seeking to hose down investors’ aggressive rate cut expectations with inflation still far above the central bank’s target of 2%.
Core CPI, which excludes volatile food and energy items, was 2.5% higher in February than a year before. It was the same rate as in January.
