SEOUL- South Korea’s consumer inflation accelerated to a more than nine-year high in May, reinforcing calls for gradual monetary tightening, though the increase was mainly due to a low base effect and rises in oil and agricultural prices.
Consumer prices rose 2.6 percent in May from a year earlier, government data showed on Wednesday, logging the fastest growth since April 2012 and matching a median estimate for a 2.6 percent increase in a Reuters survey. It grew 2.3 percent in April.
In May 2020, South Korea fell into deflation as the coronavirus pandemic struck demand and supply chains.
The country’s finance minister said that the impact from the low base and temporary supply disruptions for some agricultural products and oil prices will ease going forward.
“The government will prepare against the inflation risk from materializing, prevent excessive inflation expectations and take measures to stabilize living costs,” Finance Minister Hong Nam-ki said.
Wednesday’s data showed the cost of agricultural, livestock and fisheries products and petroleum surged 12.1 percent and 23.3 percent, respectively. – Reuters
