South Korea's consumer prices jumped at a faster pace in July, raising concerns that inflationary pressure is building up despite the government's anti-inflation efforts, a report showed Monday.
According to the report by Statistics Korea, the country's consumer price index rose 4.7 percent last month from a year earlier, quickening from the previous month's 4.4 percent gain.
The figure represents the seventh straight month that consumer prices have grown over the government's renewed annual inflation target of 4 percent for this year.
Core inflation, which excludes volatile oil and food costs, also jumped 3.8 percent from a year earlier, the largest gain in 26 months. It was also up from 3.7 percent tallied for June, the report showed.
"Prices of fresh foods rose significantly due to heavy rains last month, with costs of pork, processed goods and many other items increasing from a year earlier," Yang Dong-hee, head of the agency's price statistics division, told Yonhap News Agency.
The government recently revised upward its annual inflation target for this year from 3 percent to 4 percent.
The renewed target, however, seems to be getting tougher to achieve as there are few signs of inflationary pressure letting up any time soon with many other factors poised to drive up prices.
Heavy rainfall that devastated some of the nation's farm lands last month could continue to disrupt the supply of farm goods, possibly driving up prices of vegetables and fruits.
The report showed that the nation's fresh food price index jumped 9 percent last month from a year earlier, the highest in four months.
Inflationary pressure might go up further in the second half as the government is poised to raise major public service charges.
For starters, the government earlier said that it will hike electricity charges by 4.9 percent from this month in order to reflect rising power production costs.
"Prices increased across the board last month, but the real problem is how the figures for August will come out," Yang of the statistics agency said.
At the same time, the accelerating price hike might be turning up pressure for the nation's central bank to raise its key interest rate.
On July 14, the Bank of Korea kept its key interest rate unchanged at 3.25 percent following a hike the previous month. It will hold its next rate-setting meeting on Aug. 11.
South Korea's economy is facing heightened uncertainties at home and abroad amid worries over the eurozone debt crisis and stalled U.S. debt talks.
The South Korean economy grew 0.8 percent on-quarter during the April-June period, the slowest growth since the final quarter of last year, as export gains sharply eased amid global economic uncertainty. (Yonhap News)