South Korea’s consumer inflation rose in July due to supply-side pressure after weakening for three consecutive months, according to Reuters.
Official data showed on Friday that the inflation data was slightly above market expectations. The consumer price index (CPI) rose 2.6 per cent in July from the same month a year earlier after hitting an 11-month low of 2.4 per cent in June, whereas economists had expected a gain of 2.5 per cent.
The rise in consumer prices was in line with the finance minister’s statements last week that inflation might temporarily accelerate due to abnormal weather conditions and base effects before stabilising from August. The Bank of Korea initiated a rate cut last month after keeping interest rates at a 15-year high of 3.5 per cent for the 12th straight meeting, but the board divided on when to act.
According to Statistics Korea, the CPI rose 0.3 per cent month-on-month after falling 0.2 per cent in the previous month. It was the fastest growth in five months and slightly above economists’ expectations of a median increase of 0.25 per cent.
Prices for petroleum products also rose 3.3% for the month, agricultural products climbed 0.9%, and vegetable prices jumped 6.3%.
