Korea’s consumer prices grew at a slower pace in January as the government is pushing to fight inflation amid concerns that high prices could hurt consumption and the overall economic recovery, a government report showed Wednesday.

According to the report by Statistics Korea, the country’s consumer price index rose 3.4 percent in January from a year earlier, slowing from a 4.2 percent gain in December. It gained 0.5 percent compared to a month ago. 

Core inflation, which excludes volatile oil and food costs, grew 3.2 percent from a year earlier, which also decelerated from 3.6 percent growth reported for the previous month.

The government has been struggling to tame inflation, which was driven mostly by rising crude oil, raw material and food prices.

For 2011, the nation’s consumer prices jumped 4 percent from a year earlier, hitting the upper ceiling of the Bank of Korea’s 2-4 percent target band.

Inflation exerts negative influence on the economy since high prices can cause consumers to be reluctant to spend. High crude oil, raw materials and food prices have all contributed to inflationary pressure here.

The government expects that things will improve this year, predicting that consumer prices will grow 3.2 percent in 2012.

Farming and factory product prices still remain a drag on the government’s efforts.

Prices of agricultural, livestock and fishery products jumped 3.6 percent on-year in January, while those of factory goods rose 4.3 percent due to higher energy costs, the report showed.

Crude oil prices jumped 7 percent on-year, causing production costs of many industries to remain high. Prices of gasoline and diesel fuel rose 9.6 percent and 11 percent, respectively.

Service-sector prices also grew 2.7 percent with home rental prices gaining 5 percent over the same period, the report showed.

In particular, utility prices jumped, exerting upward inflationary pressure. Prices of electricity, tap water and heating gas rose 5.5 percent in January from a year earlier.

The fresh food price index that includes vegetables and fruits also rose 6.2 percent in January from a month earlier, though it dropped 2.5 percent from the same month a year earlier.

Taming inflation is one of the top priorities for policymakers.

Earlier this year, the Bank of Korea, the nation’s central bank, said that its monetary policy goal in 2012 will be to focus on maintaining price stability. 

(Yonhap News)