[THE INVESTOR] Korea’s consumer prices increased by less than 1 percent for the second month in a row in June, according to government data on July 1.

The country’s consumer price index rose 0.8 percent last month from a year earlier, according to Statistics Korea.


The figure also climbed 0.8 percent on-year in May, after rising 1 percent or more for the previous three months.

From a month earlier, the June figure stayed flat.

Core inflation, which excludes volatile oil and food prices, increased 2 percent compared with last year, up 0.1 percentage point from a month earlier.

Statistics Korea said prices of agricultural products, including onions and Chinese cabbage, have become stable over the recent months as the harvest season has begun.

“Fast-rising prices of fresh vegetables and meat pushed up the price index in the winter and spring, but they have stabilized to a larger extent thanks to the increased supply of these products,” said Woo Young-jae, director of the agency’s price statistics division.

Prices of agricultural products fell 4.6 percent on-year in June, and those of meat gained 3.2 percent on-year. In particular, prices of fresh food, including vegetables and fruits, retreated 1.7 percent last month from a year earlier.

In the coming months, the statistical agency expected higher oil prices to push up prices of oil-related products and gasoline at the pump and offset the downward pace of agricultural prices in stores.

“Many global investment banks forecast that crude oil prices will rise to $40 in the second half,” Woo said. “The upbeat crude oil prices will likely contribute to the overall upward pace of Korea’s price index.

The average price of Dubai crude, which accounts for over 80 percent of the country’s overall oil imports, climbed to around $46 per barrel this week after touching $26 in January.

The Finance Ministry also anticipated that the country’s inflation will come under weaker downward pressure.

“We will keep close tabs on price-moving factors to ease the daily expenses of the people,” the ministry said in a press release. “The government will put more efforts to remove possible downside risks and stabilize the prices.”

(theinvestor@heraldcorp.com)