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(LEAD) S. Korea's consumer prices grow less than 1 pct for 3rd month in Dec.

Finance 08:34 December 31, 2020

(ATTN: UPDATES with more details throughout; ADDS 2nd photo)
By Kim Soo-yeon

SEOUL, Dec. 31 (Yonhap) -- South Korea's consumer prices grew less than 1 percent for the third straight month in December, data showed Thursday, indicating low inflationary pressure in Asia's fourth-largest economy amid the new coronavirus outbreak.

The consumer price index rose 0.5 percent on-year in December, slowing from a 0.6 percent on-year gain the previous month, according to the data by Statistics Korea.

It marked the third consecutive month that the on-year growth rate of the consumer inflation stayed in the zero range.

Compared with a month earlier, the country's consumer inflation rose 0.2 percent last month, following a 0.1 percent on-month fall in November.

For the whole year, the consumer prices grew 0.5 percent on-year, marking the second straight year of the inflation growing less than 1 percent. In 2019, the consumer price index rose 0.4 percent.

It marked the first time that the annual inflation grew less than 1 percent for the second consecutive year since the statistics agency began compiling related data in 1965.

This file photo, taken Dec. 12, 2020, shows people shopping for groceries at a traditional market in western Seoul. (Yonhap)

The country's inflationary pressure has remained low this year due mainly to a decline in low oil prices and the fallout from the new coronavirus outbreak.

This year, prices of agricultural products shot up due to lingering impacts of typhoons and the rainy season in the summer.

Prices of agricultural, livestock and fisheries products jumped 6.7 percent in 2020.

But inflationary pressure stabilized as low oil prices drove down prices of petroleum products and stricter social distancing restricted rises in service prices, according to the statistics agency.

Prices of petroleum products declined 7.3 percent this year, while prices for paying personal services, including dining out and recreation, rose 1.2 percent, the lowest growth in eight years.

Subdued inflation is expected to give South Korea's central bank more room to keep an accommodative monetary stance.

The Bank of Korea (BOK) froze its policy rate at a record low of 0.5 percent in November amid heightened economic uncertainties over the COVID-19 pandemic. The bank aims to keep inflation at 2 percent over the medium term.

The BOK revised up its 2020 forecast for inflation to 0.5 percent from its previous estimate of 0.4 percent, citing an economic recovery and a pickup in oil prices. The bank expects next year's inflation to grow 1 percent.

A sign displays gas prices at a filling station in Seoul on Dec. 27, 2020. (Yonhap)

sooyeon@yna.co.kr
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