Consumer prices in South Korea were unchanged year-on-year August 2019, easing from a 0.6 percent gain in the previous month and missing market expectations of a 0.3 percent rise. That was the lowest inflation rate since the country began releasing inflation data in 1965 due mainly to a plunge in fresh foods prices.
Prices of food and non-alcoholic beverages declined by 3.3 percent in August, compared to a 0.8 percent gain a month earlier. It was the first yearly fall in the sub-index since July 2016, amid a slump in cost of fresh foods, of which fresh seafood, fresh vegetables, and fresh fruits. In addition, cost fell further for transport (-1.9 percent vs -1.6 percent); communication (-2.2 percent vs -2.6 percent); and recreation & culture (-0.2 percent, the same as in July).
9/3/2019 12:29:43 PM
At the same time, clothing and footwear prices were unchanged for the second straight month; while inflation slowed for housing, water, electricity, gas and other fuels (1.2 percent vs 1.4 percent); furnishing, household equipment & routine maintenance (1.9 percent vs 2.1 percent); health (0.9 percent vs 1 percent); education (1 percent vs 1.1 percent); and miscellaneous gooods and services (1.5 percent vs 1.8 percent). Inflation was steady for both alcoholic beverages and tobacco (at 0.8 percent) and restaurants & hotels (at 1.7 percent).
For 2019, the Bank of Korea targets inflation rate at 2 percent.
The core CPI, which excludes oil and agricultural products, advanced 0.9 percent in August, below 1 percent in July.
On a monthly basis, consumer prices increased 0.2 percent in August, reversing a 0.3 percent fall in July, but missing expectations of a 0.5 percent increase.