S. Korea’s inflation increases 0.7 pct in August

SEJONG, Sept. 2 (Yonhap) — South Korea’s consumer prices rose 0.7 percent on-year in August due to a rise in prices of agricultural goods, marking the second consecutive month of increase amid the coronavirus pandemic, data showed Wednesday.

The August tally accelerates from a 0.3 percent on-year gain in July, according to the data released by Statistics Korea.

The nation’s inflation also climbed 0.6 percent on-month in August, the data showed.

Core inflation, which excludes agricultural and petroleum products, went up 0.8 percent from a year earlier.

Utility prices gained 0.5 percent on-year last month, while prices of agricultural, livestock and fisheries products jumped 15.8 percent on-year in August, the data showed.

In August, prices of petroleum products dropped 10.1 percent on-year, the data showed. Prices of livestock products jumped 10.2 percent from a year earlier, and prices of processed foodstuffs rose 1.4 percent.

South Korea’s consumer prices had increased at less than 1 percent for 14 consecutive months before growing 1.5 percent in January, followed by a 1.1 percent increase the following month.

Slowing inflation may give the Bank of Korea (BOK) more room to ease its monetary policy.

Last week the BOK sharply lowered its growth outlook for the nation’s economy this year and froze its policy rate at a record low as uncertainties stemming from spiking virus cases heightened.

The BOK expected the nation’s economy to contract 1.3 percent this year. The latest growth projection marked a sharp cut from the central bank’s estimate in May of a 0.2 percent contraction.