SEOUL, March 12 (Yonhap) — South Korea’s vice finance minister said Friday that the growth of the country’s consumer prices is likely to temporarily pick up in the second quarter, affected by hikes in food and oil prices.
First Vice Finance Minister Kim Yong-beom said prices of crude oil, raw materials and grains are showing signs of rising amid a global economic recovery.
“Conditions for consumer prices trends in the second quarter look tough,” Kim said at a meeting with government officials on inflation.
The country’s overall inflationary pressure has remained subdued amid the COVID-19 pandemic. But recent hikes in food and oil prices are spawning concerns that inflation may pick up amid an economic slowdown.
Consumer prices grew at the fastest clip in one year in February due mainly to sharp gains in prices of agricultural and livestock products.
Last month, prices of farm, livestock and fisheries products rose 16.2 percent on-year, the fastest gain in 10 years.
Some experts raised concerns about “agflation,” inflation sparked by price hikes in farm products.
But Kim said recent instability in consumer prices was widely anticipated as prices, which were subdued due to the fallout of the pandemic, are undergoing a temporary correction amid an economic recovery.
“Liquidity has sharply increased in the process of responding to (the COVID-19) crisis. (Ample) liquidity can create the byproduct of price instability,” he said.