SEOUL, May 4 (Xinhua) — South Korea’s headline inflation hit a 44-month high last month on expensive farm goods and oil products, raising worry about inflationary pressure caused by the record-low policy rate to tackle the COVID-19 pandemic, statistical office data showed Tuesday.
The consumer price index (CPI) came in at 107.39 in April, up 2.3 percent from a year earlier, according to Statistics Korea. It marked the fastest increase in 44 months since August 2017.
The consumer price inflation surpassed the Bank of Korea (BOK)’s inflation target of 2 percent, putting pressure on the BOK to hike its key rate that was cut in May last year to an all-time low of 0.50 percent to address the economic turmoil from the pandemic.
The headline inflation moved in a range of between zero and 1 percent last year as the toughened social-distancing campaign reduced demand for dining-out amid the economic slump, which also lowered price for global crude oil.
The inflation, however, accelerated this year from 0.6 percent in January to 1.1 percent in February and 1.5 percent in March on the back of a higher price for farm goods and oil products.
Price for agricultural, livestock and fishery products surged 13.1 percent in April on a yearly basis, keeping a double-digit growth for the fourth consecutive month.
Agricultural product price jumped 17.9 percent due to bad weather. Green onion price almost tripled, and price for apple, powdered red pepper and rice gained in double figures.
Livestock product price advanced 11.3 percent on a spike in egg price, caused by the avian influenza (AI) outbreak.
Price for industrial products, including oil products, picked up 2.3 percent in April from a year earlier as global crude oil became expensive amid the emerging signs of global economic recovery.
Oil product price soared 13.4 percent in April, logging the highest rise in nearly four years since March 2017. Price for gasoline and diesel spiked 13.9 percent and 15.2 percent respectively.
The statistical office forecast that the supply-side inflationary pressure, caused by higher price for farm goods and oil products, would be moderated in the second half, seeking to relieve anxiety over the high inflation.
Services price increased 1.3 percent in April from a year ago, topping 1 percent for the first time since the COVID-19 outbreak. It was attributable to the launch of vaccination campaigns in late February and the signs of economic recovery.
Private services price went up 2.2 percent on stronger eating-out demand, but public services price fell 1.0 percent amid the expanded welfare policy such as free high school education.
Price for electricity, tap water and natural gas declined 4.9 percent in April from a year earlier.
Housing rent, including Jeonse and monthly rent, added 1.2 percent in April from a year earlier. It was the highest increase since December 2017.
Jeonse is the country’s unique contract between two households where a landlord grants the two-year residential right to a tenant who in turn lends a certain amount of money, or deposit, to the landlord.
Cost for food and non-alcoholic beverage soared 8.1 percent, but expense for communication and education slipped 1.8 percent and 1.1 percent respectively last month.
Core consumer price, which excludes volatile agricultural and oil products, moved up 1.4 percent in April on a yearly basis. The OECD-method core price, which excludes food and energy cost, was up 1.1 percent in the month.
The fresh food index, which gauges price for fish, shellfish, fruit and vegetable, jumped 14.6 percent.
The livelihood items index, which measures price for daily necessities, increased 2.8 percent last month.