South Korea CPI shows short-term consumer price growth losing steam

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Consumer inflation in South Korea pushed higher in March as prices rose at their quickest year-on-year clip since 2012, but a headline gauge of month-on-month inflation showed no change from February’s level, indicating a loss of steam for short-term price growth.

South Korea’s consumer price index rose 2.2 per cent year on year March, according to Statistics Korea. That was up from 1.8 per cent in February and just above a median estimate from economists polled by Reuters predicting growth of 2 per cent.

That was the fastest pace since June 2012, when prices rose at the same rate.

Though still down from January’s level, price growth for food and non-alcoholic beverages accelerated to 3.5 per cent year on year (up 0.6 percentage points), while transport costs edged still higher with a rise of 6.4 per cent (up 0.4 percentage points).

However, core CPI, which excludes agricultural products and oil prices inched lower to 1.4 per cent for the period. OECD core CPI, which excludes all volatile food and energy prices, was 1.7 per cent for a third straight month.

In month-on-month terms headline CPI fell to zero, indicating no change from February and ending a three month streak of sequential price growth. That was true of the month-on-month reading for core CPI as well, with OECD core CPI slowing to just 0.1 per cent growth from the previous month.

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