South Korea’s consumer price index rose 0.7 percent last month on-year, the slowest in 10 months, according to Statistics Korea on Tuesday.
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Consumer prices in South Korea fell to 10-month low during the month of July, remaining slightly below what markets had earlier expected, weighed by softer local demand and low energy-import costs. Similarly, he said, in July, the Wholesale Price Index (WPI) based inflation increased by 2.34 per cent while Sensitive Price Index increased by 1.32 per cent. The indicator of electricity and fuel gas prices dropped 3.9% in July, with indices of gasoline and diesel falling 8.4% and 9%, over the same period.
“The fall in crude oil prices not only impacted the price of petroleum products but also dragged down the overall prices for electricity, water and gas”, said Yoo Young-je, a director at Statistics Korea.
That was below the median estimate of 0.8 percent according to a Reuters poll and slower than the 0.8 percent rise witnessed in June.
The central bank lowered its outlook for consumer prices increasing 1.1 percent from 1.2 percent this year.
“With growth in Europe likely to slow post-Brexit, we think low inflation may persist, and the BOK’s inflation target of 2 percent for 2016-2018 is highly likely to be missed”.
Industrial goods prices shed 0.5 percent in July on a year basis as oil product prices slid at a faster clip. Prices of vegetables such as lettuce rose 47.6 percent.
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Prices for radish and spring onion, declined 23.5 percent and 22.4 percent each last month, with those for onion and sweet potato sliding 19.8 percent and 18.4 percent respectively. The cost of jeonse, or lump-sum deposit rent contracts, was up 3.6 percent compared to the previous year.
