South Korea Inflation Rate at 5-1/2-Year High Of 2.6% in August


South Korea’s inflation rate jumped to 2.6 percent in August of 2017 from 2.2 percent in the previous month, well above market expectations of 2.2 percent. It was the second time in five months that the inflation rate stands above the central bank's target of 2.0 percent. The fresh food index increased a sharp 18.3 percent after rising 12.3 percent in July, mostly affected by a rise in seafood prices. On a monthly basis, consumer prices jumped 0.6 percent (vs 0.2 percent in July), also significantly surpassing consensus expectations of a 0.2 percent rise.

In August, prices increased at a faster pace for: food and non-alcoholic beverages (7.4 percent from 5.6 percent in July); restaurants & lodging (2.5 percent from 0.3 percent); and other products and services (2.6 percent from 0.1 percent). Health (1.3 percent from 0.0 percent); and education costs (1.1 percent from 0.0 percent) rose sharply after remaining unchanged in the previous month.

Costs rebounded for housewares (0.9 percent from -1.1 percent) and traffic (1.6 percent vs -0.7 percent). Meanwhile, costs rose less compared to a year earlier for: liquor & tobacco (1.6 percent vs 1.8 percent) and communications (0.3 percent vs 0.5 percent).

Inflation was steady for clothing and footwear (1.2 percent) and utilities (3.9 percent).

On a monthly basis, consumer prices rose 0.6 percent after rising 0.2 percent in July, significantly outpacing market expectations of a 0.2 percent rise.

Core inflation, which excludes volatile items such as oil and food, rose 1.8 percent after also rising 1.8 percent in the previous month. 

Mario | mario@tradingeconomics.com
8/31/2017 11:55:35 PM