In August of 2014, cost of housing and utilities rose 2.7 percent year-on-year, slightly easing from 2.8 percent in July. Clothing and footwear prices increased 4.6 percent, down from 5.2 percent in the previous month. Health cost also decelerated in August (+0.8 percent compared with 1.3 percent in July). In contrast, prices accelerated for furnishing, household equipment and routine maintenance (+2.4 percent in August from +2.3 percent in July) and recreation and culture (+0.9 percent from +0.3 percent), while education cost rose 1.7 percent, the same rate recorded in July.
Additional downward pressures came from transport prices (-1.9 percent from - 0.9 percent), communication (-0.1 percent from 0.0 percent), food and non-alcoholic beverages (-0.5 percent from +1.1 percent) and alcoholic beverages and tobacco (-0.1 percent from - 0.2 percent).
On a month-on-month basis, the inflation rate accelerated to 0.2 percent in August of 2014 from 0.1 percent in July. Price pressures came mainly from recreation and leisure (1.3 percent), food and non-alcoholic beverages (0.8 percent); housing, water and utilities (0.2 percent) and furnishing, household equipment & routine maintenance (0.1 percent).
Core CPI, which strips out volatile energy and food prices, gained 2.4 percent year-on-year in August of 2014 after increasing 2.2 percent in July.
The central bank of Korea forecasts inflation for 2014 to accelerate to 1.9 percent from 1.3 percent last year.