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(2nd LD) Consumer prices grow at less than 1 pct for 4th month in Jan.

All News 10:09 February 02, 2021

(ATTN: UPDATES with more details in paras 9-14, 18)
By Kim Soo-yeon

SEOUL, Feb. 2 (Yonhap) -- South Korea's consumer prices grew by less than 1 percent for the fourth straight month in January, data showed Tuesday, indicating that the country's inflationary pressure remains low amid the pandemic.

The consumer price index rose 0.6 percent on-year in January, compared with a 0.5 percent on-year gain the previous month, according to the data compiled by Statistics Korea.

It marked the fourth consecutive month that the on-year growth rate of consumer inflation stayed below 1 percent.

Compared with a month earlier, the index grew 0.8 percent last month, following a 0.2 percent on-month rise in December.

Core inflation, which excludes volatile food and oil prices, rose 0.4 percent on-year.

Citizens shop for groceries at a traditional market in central Seoul on Jan. 31, 2021. (Yonhap)

Citizens shop for groceries at a traditional market in central Seoul on Jan. 31, 2021. (Yonhap)

The country's inflationary pressure has remained subdued due largely to low oil prices and the fallout of the new coronavirus outbreak.

The Korean currency's gain against the U.S. dollar also pulled down imported prices, exerting downward pressure on the inflation.

Last year, the country's consumer prices grew 0.5 percent on-year. It marked the first time that inflation grew less than 1 percent for two straight years.

Despite the overall subdued inflation, prices of agricultural, livestock and fisheries products jumped last month, indicating that people probably felt high price pressure in their daily lives.

"Compared with December, the on-year growth of consumer prices picked up last month as a rise in prices of farm and livestock products accelerated and a fall in petroleum goods prices slowed," the finance ministry said in a statement.

Affected by the outbreak of bird flu here, prices of livestock products jumped 11.5 percent on-year, the fastest growth since June 2014. Prices of eggs soared 15.2 percent, the fastest since March 2020. Avian influenza has ravaged chicken farms across the nation since November last year.

Prices of agricultural products gained 11.2 percent as frequent cold spells and heavy snow dented production of vegetables.

Prices of petroleum products declined 8.6 percent from a year earlier, due to low oil prices.

Housing prices showed no letup despite the government's efforts to stabilize soaring home prices. Housing prices rose 0.7 percent from a year ago in January, marking the ninth straight month of on-year gain.

Still, the country's low inflationary pressure is expected to give South Korea's central bank more room to maintain an accommodative monetary stance.

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

The BOK forecast the country's inflation to rise 1 percent this year, citing an economic recovery and a increase in oil prices.

The finance ministry said consumer prices for this month are expected to show a similar pattern as in January, adding that the COVID-19 pandemic and oil price movements will likely serve as major factors that affect inflation.

Eggs are displayed at a supermarket in Seoul on Feb. 1, 2021. (Yonhap)

Eggs are displayed at a supermarket in Seoul on Feb. 1, 2021. (Yonhap)


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