Consumer prices rise at a fast pace in January
The country’s inflation also rose 0.6 percent on-month in January on the back of increased prices of agricultural and industrial products, according to Statistics Korea.
Core inflation, which excludes agricultural and petroleum products, increased 0.9 percent from a year earlier.
Utility prices were unchanged on-year in January, while prices of agricultural, livestock and fisheries products went up 0.6 percent, the data showed.
Last year, Korea’s consumer prices climbed 0.4 percent on-year, marking the slowest growth since 1965.
“In January, a rise in consumer prices was driven by gains in oil prices and agricultural products,” Ahn Hyung-joon, a Statistics Korea official, told reporters.
Vegetable prices jumped 10.2 percent from December, the statistics office said. Fruit prices dropped 7.6 percent, and livestock costs gained 2 percent.
Industrial goods prices increased 0.4 percent, and oil prices rose 1.2 percent, the statistics office said.
Concerns about the economic impact of the new coronavirus are likely to affect consumer prices in February, Ahn said, but it is too early to predict how the virus will affect inflation in Asia’s fourth-largest economy.
The country’s inflation has been extremely weak, staying far below the Bank of Korea’s 2 percent target as companies and consumers tighten their spending.
The statistics office expected consumer prices to hover above 1 percent this year.
The Bank of Korea slashed its key rate twice last year to support growth amid the U.S.-China trade war.
Last year’s weaker inflation was attributable to a base effect because consumer prices were relatively high in 2018, Ahn said.
In a statement, the Ministry of Economy and Finance said the government will closely monitor the trend of consumer prices this year.