SEOUL ⸺ South Korea’s consumer inflation accelerated to a 13-month high in February on improving domestic demand and rising global oil prices, official data showed on Thursday, further signalling a gradual recovery in Asia’s fourth-largest economy.
The consumer price index (CPI) rose 1.1% year-on-year in February, Statistics Korea said, the fastest since a 1.5% rise in January 2020 and beating a median 1.0% increase tipped in a Reuters poll.
The index rose 0.6% in January.
“Going forward, there are more upside factors for inflation … Despite the resurgence in coronavirus, the (South Korean) economy is generally seen recovering. There will be an increase in demand, which will add upward pressure on inflation,” a Statistics Korea official told reporters.
Data showed the cost of fresh food surged 18.9% from a year earlier, due to the nation’s Lunar New Year holidays and as the impact of heavy snowfalls in January and cold weather weighed on crop production.
Housing rents also grew 0.9%, the sharpest increase in nearly three years, the official added.
Month-on-month inflation was 0.5%, versus a 0.8% rise in January, but still faster than the poll’s prediction of a 0.4% increase.
Last week, the Bank of Korea raised this year’s inflation outlook to 1.3% from 1.0% previously, while keeping the policy interest rate unchanged at a record low of 0.50%.
Reporting by Joori Roh; Editing by Richard Pullin; Reuters