This file photo, taken April 2, 2021, shows vegetables for sale at a traditional market in Seoul. (Yonhap)
South Korea's consumer prices grew at the fastest pace in almost four years in April on higher prices of farm and oil goods, data showed Tuesday, indicating that the country may face growing inflationary pressure.
The consumer price index rose 2.3 percent on-year in April, accelerating from a 1.5 percent gain the previous month, according to the data compiled by Statistics Korea.
It marked the fastest on-year gain since August 2017, when the price index climbed 2.5 percent.
Compared with a month earlier, the index grew 0.2 percent last month, following a 0.1 percent on-month rise in March. Core inflation, which excludes volatile food and oil prices, rose 1.1 percent on-year last month.
"Consumer prices have continued to rise amid a short supply of agricultural products and the outbreak of bird flu. Prices of petroleum products also jumped as oil prices picked up," Eo Woon-sun, a senior Statistics Korea official, told reporters.
The country's inflationary pressure remained low last year due to the fallout of the COVID-19 pandemic.
But consumer inflation is increasingly under upward pressure as the Korean economy is on a recovery track, led by robust exports and a low base effect.
Policymakers said consumer prices are expected to temporarily pick up in the second quarter, led by rising prices of farm and oil products.
Last month, prices of agricultural, livestock and fisheries products gained 13.1 percent on-year, led by higher prices of vegetables and eggs.
Prices of petroleum products rose 13.4 percent on-year, the fastest since March 2017, as oil prices picked up amid a global economic recovery.
Prices of Dubai crude, South Korea's benchmark, reached an average of $62.8 per barrel in April, sharply up from $20.4 the previous year, according to the finance ministry.
Home prices extended their gains last month despite the government's efforts to stabilize them. House prices rose 1.2 percent on-year in April, marking the 12th straight month they have gone up.
"For the time being, consumer inflation will likely remain high due largely to the base effect and demand-pull pressure (from an economic recovery)," Eo said.
Starting in the second half, price pressure is expected to ease as prices of farm and oil products will likely stabilize.
Policymakers said despite increased price pressure, the annual consumer inflation is unlikely to top the central bank's inflation target of 2 percent.
The country will seek to import more eggs this month in a bid to help stabilize rising prices of the food that were caused by the outbreak of avian influenza.
South Korea brought in 40 million eggs in April, more than the initially planned imports of 25 million. Since late January, the country has increased imports of eggs totaling more than 100 million to ease a supply shortage.
The government will also release stockpiles of nonferrous metals to companies facing business setbacks due to a hike in raw material prices.
Last month, the Bank of Korea (BOK) froze its key interest rate at a record low of 0.5 percent amid concerns of another wave of infections.
The BOK revised up its 2021 inflation outlook to 1.3 percent from its earlier estimate of 1 percent.
"If the COVID-19 vaccine rollout and an economic recovery accelerates in the second half, inflation pressure could build up," said Sung Tae-yoon, an economics professor at Yonsei University. (Yonhap)