SEOUL ⸺ South Korea’s consumer inflation accelerated to a near four-year high in April, mainly due to a low base in 2020 and rising oil and agricultural prices.
The consumer price index (CPI) rose 2.3% year-on-year in April, Statistics Korea said on Tuesday, logging the fastest growth since a 2.5% rise in August 2017 and beating a median 2.2% increase tipped in a Reuters poll.
The index rose 1.5% in March.
The country’s vice finance minister said that was led by rising oil and agricultural prices and a low comparison level last year when the pandemic hit consumer demand.
“The consumer inflation will likely hover above 2% in the second quarter temporarily due to base effect and supply factor,” he added.
In fact, inflation in May 2020 fell below zero for the first time since September 2019 as the coronavirus pandemic weighed on domestic demand.
Meanwhile, Tuesday’s data showed the cost of agricultural, livestock and fisheries products and petroleum surged 13.1% and 13.4%, respectively.
Core CPI for April, excluding volatile energy and food prices, rose 1.1% year-on-year, marking the sharpest rise since February 2019 and faster than a 0.6% rise in the previous month.
Month-on-month inflation was 0.2%, versus a 0.1% increase in March. The poll predicted a 0.1% rise.
The Bank of Korea currently sees inflation at 1.3% for the whole of this year, compared with 0.5% in 2020. Revised forecasts will be released later this month.
Reporting by Joori Roh; Editing by Leslie Adler and Sam Holmes; Reuters