SEOUL, Dec. 2 (Yonhap) — South Korea’s consumer prices grew at a faster pace in November than a month earlier as prices of agricultural products and service charges went up, data showed Wednesday.
The consumer price index rose 0.6 percent on-year last month, compared with a 0.1 percent on-year gain in the previous month, according to the data by Statistics Korea.
In October, the country’s inflation rate grew at the slowest pace in four months due to state subsidies for mobile phone bills.
Compared with a month earlier, the country’s consumer inflation declined 0.1 percent last month following a 0.6 percent on-month fall in October.
Core inflation, which excludes volatile food and oil prices, gained 0.6 percent last month from the previous year.
“In November, the growth of consumer inflation picked up as the impact of one-off state subsidies for communications fees receded and prices of farm products rose,” Ahn Hyung-joon, a senior Statistics Korea official, said at a press briefing.
Prices of agricultural products jumped 13.2 percent last month from a year earlier, while prices of services rose 0.4 percent on-year in November.
Prices for dining out inched up 0.9 percent from a year earlier as people refrained from going outside amid tougher social distancing measures. The statistics agency said such prices grew 2-3 percent on-year in the past.
Prices of petroleum products declined 14.8 percent on-year in November following a 14 percent on-year fall in October, as the local currency gained against the U.S. dollar.
Housing prices showed no letup despite the government’s efforts to stabilize soaring home prices. Housing prices rose 0.6 percent on-year in November, the fastest gain since June 2018, when home prices also went up 0.6 percent.
Still, the country’s inflationary pressure has remained low this year due mainly to low oil prices and the fallout from the new coronavirus outbreak.
“Inflation pressure has remained low, affected by low oil costs, the government’s support for education fees and letup in prices of dining out amid the pandemic,” Ahn said.
The finance ministry said consumer prices are expected to show a similar pattern in December to that of November.
The won’s gain will put downward pressure on inflation, but the possibility of higher raw material prices and an end to the subsidies for mobile phone bills will likely exert upward pressure on consumer prices, it added.
Subdued inflation is expected to give South Korea’s central bank more room to keep an accommodative monetary stance.
The Bank of Korea (BOK) froze its policy rate at a record low of 0.5 percent in November amid heightened economic uncertainties over the COVID-19 pandemic. The bank aims to keep inflation at 2 percent over the medium term.
The BOK revised up its 2020 forecast for inflation to 0.5 percent from its previous estimate of 0.4 percent, citing an economic recovery and a pickup in oil prices. The BOK also raised next year’s inflation outlook to 1.5 percent from its August forecast of 1 percent.