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(LEAD) S. Korea's consumer prices rise 0.8 pct on-year in May

All News 09:16 June 01, 2016

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SEJONG, June 1 (Yonhap) -- South Korea's consumer prices grew by less than 1 percent in May for the first time in four months, government data showed Wednesday.

The country's consumer price index rose 0.8 percent last month from a year earlier, according to the data compiled by Statistics Korea.

The index had stayed above the 1 percent level for three straight months since February for the first time in 17 months.

From a month earlier, the May figure stayed flat.

Core inflation, which excludes volatile oil and food prices, increased 1.9 percent compared with last year, staying unchanged from a month earlier.

Statistics Korea said the fast-rising prices of agricultural products, including Chinese cabbage, onions and garlic, stabilized to a larger extent than in the previous month.

Prices of agricultural products edged up 0.2 percent on-year in May, and those of meat gained 1.5 percent on-year. In particular, prices of fresh food, including vegetables and fruits, rose 3.5 percent last month from a year earlier.

In April, however, the price index was buoyed by high-flying farm product prices, which jumped 6.5 percent on-year, with fresh food soaring nearly 10 percent.

Service bills, including public transportation fees, rent and housing bills, rose 2.2 percent on-year last month, while those of petroleum products slumped 11.6 percent amid a global trend of low oil prices.

"The supply of onions and Chinese cabbages has expanded to stabilize the prices and contributed to the overall index slowdown," said Woo Young-jae, director of the agency's price statistics division.

He said higher prices of oil-related products and gasoline at the pump will likely offset the downward pace of agricultural prices in the coming months.

"The recent low inflation trend is largely attributable to falling global oil prices," said Woo. "The price index will turn around in the future as the global crude prices are showing clear signs of picking up."

The average price of Dubai crude, which accounts for over 80 percent of the country's overall oil imports, climbed to reach around US$46 per barrel last week, compared with the nearly 17-year low of $22 tallied in February.


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