SEOUL, 2nd August, 2023 (WAM) — South Korea’s consumer price growth slowed for the sixth straight month in July to the lowest level in 25 months on the back of lower oil prices, state news agency (Yonhap) reported on Wednesday. Consumer prices, a key gauge of inflation, rose 2.3 percent last month from a year earlier, compared with a 2.7 percent increase in June, according to the data from Statistics Korea. It marked the lowest advance since June 2021. In June, inflation fell below 3 percent for the first time since September 2021. Core inflation, which excludes volatile food and energy prices, rose 3.3 percent on-year in July, down from a 3.5 percent increase tallied in June. The prices of utility services continued to grow sharply, advancing 21.1 percent over the period, as the state-run Korea Electric Power Corp. raised electricity bills to make up for its snowballing losses. South Korea depends heavily on imports for its energy needs. The overall rise, however, was limited as prices of agricultural and fishery products edged down 0.5 percent. Prices of industrial products remained unchanged in July, as those of diesel and gasoline plunged 33.4 percent and 22.8 percent, respectively, offsetting gains in bread that shot up 8.1 percent. The price of fuel, in particular, fell at the sharpest rate since the agency started compiling related data in 1985. The service sector gained 3.1 percent on-year in July due to higher insurance and house management costs. Prices of daily necessities — 144 items closely related to people’s everyday lives, such as food, clothing and housing — climbed 1.8 percent on-year, slowing from a 2.3 percent jump a month earlier. Last month, the Bank of Korea kept its key interest rate unchanged at 3.5 percent for the fourth straight time. The central bank delivered seven consecutive rate hikes from April 2022 to January 2023. In a separate report, the Ministry of Economy and Finance also noted that the country may face more upward pressure in inflation down the road. “In August and September, the country may face more uncertainties in inflation due to seasonal factors, such as weather conditions and Chuseok, as well as the rise in international energy prices,” the ministry said. In July, the finance ministry suggested slower-than-expected inflation of 3.3 percent for 2023, compared to the previous estimate of 3.5 percent.
Source: Emirates News Agency (WAM)