South Korea's consumer prices grew at the 2 percent level for the third consecutive month in March, driven by a weaker local currency that pushed up food prices and rising service costs, government data showed Wednesday.
Consumer prices, a key gauge of inflation, increased 2.1 percent from a year earlier last month, according to the data from Statistics Korea. This follows a 2.2 percent on-year rise in January, which marked the steepest on-year increase since July, and a 2 percent gain in February.
Consumer inflation has remained below 3 percent since April last year and under the central bank's 2 percent target since September, when it posted a 1.6 percent increase. The rate further dropped to 1.3 percent in October before edging up to 1.5 percent in November and 1.9 percent the following month.
The recent uptick was attributed to the depreciation of the Korean won, which drove up prices of imported food and agro-fisheries products, as well as rising service costs, the agency said.
By sector, prices of agricultural, livestock and fisheries products increased 0.9 percent on-year in March, while industrial goods rose 1.7 percent, according to the agency.
Notably, processed food prices climbed 3.6 percent as major food companies raised prices due to the rising cost of imported raw materials.
Electricity, gas and water prices surged 3.1 percent on-year, the agency said.
Service prices increased 2.3 percent, partly driven by higher dining-out costs, which rose 3 percent.
Insurance prices skyrocketed by 15.1 percent, while apartment maintenance fees increased 4.3 percent.
"Prices of personal services are on an upward trend, particularly after major private universities raised tuitions. Additionally, the rise in processed food prices remains noticeable," said Lee Doo-won, an official at Statistics Korea. "Exchange rates continue to influence food and agricultural prices."
The won has come under pressure amid political uncertainty following President Yoon Suk Yeol's brief imposition of martial law Dec. 3. The situation has been further exacerbated by US President Donald Trump's tariff escalations, which could weigh on South Korea's export-driven economy.
Core inflation, which excludes volatile food and energy prices, grew 1.9 percent on-year, staying below the 2 percent level for the sixth consecutive month.
Prices of daily necessities -- 144 items closely related to people's everyday lives, such as food, clothing and housing -- went up 2.4 percent, slightly decelerating from a 2.6 percent year-on-year increase in the previous month. (Yonhap)
