Inflation hits a 14-month low, declining to 3.7 percent in April

Inflation came in at 3.7 percent in April, the lowest in 14 months. Vegetable prices increased 7.1 percent on year. The photo above shows a woman shopping at a supermarket in Seoul on Tuesday. [NEWS1]

Inflation came in at 3.7 percent in April, the lowest in 14 months.

The figure was down from the 4.2 percent in March, according to Statistics Korea Tuesday.

It was the first time inflation fell below 4 percent since February last year. Inflation peaked at 6.3 percent last July.

Electricity, gas, water and service prices soared while oil prices fell.

On month, the Consumer Price Index (CPI) increased by 0.2 percent.

Prices for electricity, gas, and water jumped 23.7 percent on year in April but were unchanged from March. Gas prices soared 32.5 percent on year, and electricity jumped 22.5 percent.

Slow price growth for agricultural goods and oil contributed to lower inflation, according to the Bank of Korea (BOK).

Prices for agricultural, livestock and fishery products inched up 1 percent on year, while those for industrial products, including gasoline and diesel, went up 2 percent during the same period.

Vegetable prices jumped 7.1 percent on year. By category, broccoli soared 28 percent, cabbage by 13.5 percent and potatoes by 12.5 percent.

Service prices were up 6.1 percent. The cost of dining out rose 7.6 percent. Service prices, excluding restaurant prices, increased by 5 percent. The rise is the highest since November 2003.

The rise is attributed to the surge in demand for traveling as the Covid-19 travel restrictions continue to be lifted.

The price of petroleum fell 16.4 percent on year, the biggest decline since May 2020 when the figure was 18.7 percent.

Core inflation, which excludes the volatile food and energy prices, remained strong at 4.6 percent in April but was down slightly from 4.8 percent a month earlier.

Inflation is projected to decline steadily until June.

“The growth in consumer prices will show clear signs of falling until the middle of this year,” BOK Deputy Governor Kim Woong.“Core inflation will rise at a slower pace than CPI for a while.”

Excluding Korea, only four OECD states — Spain, Japan, Luxemburg and Switzerland — reported inflation below 4 percent, according to the Ministry of Economy and Finance.

“Compared to other countries, Korea is relatively seeing a faster pace in slowing down inflation amid rising global energy price and inflation,” the ministry said.

Inflation figures for May will be released on June 2.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]