S.Korea's headline inflation posts 2 pct for 2 months on higher farm goods price

Source: Xinhua| 2018-12-04 15:48:18|Editor: Shi Yinglun
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SEOUL, Dec. 4 (Xinhua) -- South Korea's headline inflation posted 2 percent for two months through November due mainly to higher farm goods price, a government report showed Tuesday.

The consumer price index stood at 104.73 in November, up 2 percent from a year ago, according to Statistics Korea. It was the identical figure with October, after hovering below 2 percent for 12 months through September.

The higher inflation stemmed from expensive farm goods. Price for agricultural products jumped 14.4 percent last month, pulling up the overall headline inflation by 0.6 percentage points.

Vegetable price surged 14.1 percent. Prices for ginger, tomato, carrot and green onion all recorded a double-digit increase in November.

Livestock product price slipped 1.5 percent in November from a year ago on cheaper egg and pork, of which prices retreated 14.3 percent and 4.4 percent, respectively.

Industrial goods price gained 1.5 percent last month, raising the overall inflation by 0.47 percentage points. It was lower than a 2 percent rise in October as the government cut fuel taxes in a bid to boost consumer spending.

Taxes for gasoline, diesel and liquified petroleum gas (LPG) were lowered by around 15 percent for six months from Nov. 6.

Oil product price was up 6.5 percent in November, lifting the headline inflation by 0.3 percentage points, but it was lower than a 11.8 percent gain in October.

Prices for gasoline and diesel rose 5.1 percent and 9.1 percent each in November, but those were lower than figures tallied in October.

Kerosene price surged 16.4 percent last month as it was excluded from the fuel tax cut. It was the fastest increase in about seven years.

Prices for electricity, tap water and natural gas went up 1.5 percent in November from a year earlier, pulling up the overall inflation by 0.06 percentage points.

Services price gained 1.5 percent in November, the fastest increase in five months. Private services price picked up 2.5 percent, raising the consumer price inflation by 0.79 percentage points.

The so-called livelihood price index, which gauges costs for daily necessities, rose 2.1 percent last month.

The fresh food index, which measures prices for vegetable, fruit and fish, jumped 10.4 percent on a year basis.

Core consumer price, which excludes volatile agricultural and oil products, added 1.3 percent in November from a year earlier. The OECD-method core price, which excludes food and energy costs, was up 1.1 percent.

The core inflation readings showed a low inflationary pressure from the demand side, raising the possibility for the Bank of Korea (BOK)'s next rate hike to come later than expected.

The BOK hiked its benchmark interest rate from 1.50 percent to 1.75 percent in late November, the first rate increase in 12 months.

The BOK's target rate remained low compared with the U.S. Federal Reserve's benchmark rate, which was raised to a range of 2.00-2.25 percent in September, but two of the seven BOK monetary policy board members dissented from the November rate hike.