South Korea inflation edges up, still below target

South Korea inflation edges up, still below target

June 4, 2019

SEOUL — South Korea’s consumer inflation edged up in May but still stayed far below its annual 2% target.

The marginal pick-up in inflation was largely due to rising utility bills on higher international crude prices and milder fuel-price cuts at home, but the overall price pressure still remained soft, according to the statistics office that released the data early Tuesday.

The benchmark consumer-price index rose 0.7% in May from a year earlier — slightly faster than the prior month’s 0.6% increase. The latest reading missed the median market forecast of a 0.9% gain.

Compared with the prior month, the index gained 0.2% in May, also missing the market expectations for a 0.4% gain. The May reading was softer than the previous month’s 0.4% increase.

Core CPI, which strips out volatile energy and food prices, in May gained 0.8% from a year ago and 0.1% from a month ago — marginally slower than the April paces of 0.9% and 0.2% respectively.

The central bank has recently been under growing pressure to ease policy partly due to the subdued inflation. Its base rate held steady since its November rate increase.

The bank has lowered its inflation forecast to 1.1% for this year from its earlier projection of 1.4%.

Inflation averaged 1.5% last year, slower than the 1.9% pace in 2017.

Write to Kwanwoo Jun at [email protected]

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