Go to Contents Go to Navigation

(LEAD) Korea's inflation dips 0.3 pct in May, first fall in 8 months

All News 09:06 June 02, 2020

(ATTN: RECASTS headline; ADDS remarks, details from 6th para)
By Kim Deok-hyun

SEJONG, June 2 (Yonhap) -- South Korea's consumer prices fell 0.3 percent on-year in May due mainly to a fall in oil prices and the coronavirus pandemic, marking the first annual decline in eight months, data showed Tuesday.

The May tally compares with a 0.1 percent on-year gain in March, according to the data released by Statistics Korea.

The nation's inflation fell 0.2 percent on-month, the data showed.

Core inflation, which excludes agricultural and petroleum products, rose 0.5 percent from a year earlier.

Utility prices fell 0.7 percent on-year last month, while prices of agricultural, livestock and fisheries products climbed 3.4 percent on-year in May, the data showed.

(LEAD) Korea's inflation dips 0.3 pct in May, first fall in 8 months - 1

It was the second time that the annual inflation rate fell below zero since the statistics agency began releasing the data in 1965. The country's inflation slipped 0.4 percent on-year in September last year.

Ahn Hyung-joon, a senior official at Statistics Korea, told reporters that the decline in the May inflation rate was mainly attributed to a plunge in oil prices.

Social distancing rules have also weighed on prices in the service sector, Ahn said.

In May, prices of petroleum products plunged 18.7 percent on-year, the data showed. Prices of livestock products rose 7.2 percent from a year earlier, and prices of processed foodstuffs rose 1.3 percent.

Automobile prices, on the other hand, slipped 2.2 percent on a government tax break aimed at promoting consumption.

South Korea's consumer prices had increased at less than 1 percent for 12 consecutive months before growing 1.5 percent in January, followed by a 1.1 percent increase the following month

Slowing inflation may give the Bank of Korea (BOK) more room to ease its monetary policy.

Last week, the BOK slashed its policy rate by a quarter percentage point to a record low of 0.5 percent as the nation's economy is expected to grow at the slowest pace in over two decades amid the pandemic.

The rate cut came a little over two months after the BOK cut the base rate to 0.75 percent from 1.25 percent in its first emergency rate cut since October 2008.

kdh@yna.co.kr
(END)

HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!