South Korea’s consumer prices grew at less than 1 percent for the fifth month in a row in April, a government report showed Friday, fueling worries of deflation.
The country’s consumer price index inched up just 0.4 percent last month from a year earlier, well below the government’s 2 percent growth target for 2015, the report by Statistics Korea showed.
Last month’s number is unchanged from the 0.4 percent growth tallied for March, which was the lowest increase since July 1999, when consumer prices rose 0.3 percent on-year.
Excluding the effect of the cigarette price hike, South Korea’s consumer prices effectively dropped last month from a year earlier. Cigarette prices rose by an average of 2,000 won (US$1.86) per pack starting this year.
“The low inflation number is mainly due to a drop in international crude prices that impacted refined petroleum products, as well as utilities,” said Kim Bo-kyoung, head of the statistical agency’s prices statistics division.
Lower oil product prices and utilities pushed down overall inflation by 1.41 percentage points last month vis-a-vis the year before, she said.
Oil prices plunged 20.9 percent on-year in April, while electricity, water and gas charges fell 5.9 percent. A good harvest for winter and spring crops caused agricultural prices to also backtrack 1.1 percent.
Core inflation, which excludes volatile oil and food prices, increased 2 percent on-year and was up 0.1 percent from the previous month.
April marked the fourth straight month that core inflation grew by more than 2 percent on-year.
“Core inflation has been in the 2 percent range since January, which is a sign that people are spending,” Kim said.
The cost of services gained 1.6 percent in April from the year before and 0.3 percent vis-a-vis March due to rising costs of rent, as well as modest gains in private service fees.
The report, however, showed that the “living necessities” price index, which measures the cost of key daily products that people consume, again contracted 0.7 percent on-year.
This marks the fourth time that this index has been in negative territory since the statistical agency started compiling such figures in 1995. Growth numbers have been falling generally since August 2014, hitting negative territory in January at minus 0.3.
(Yonhap)
