South Korea’s consumer prices shot up at the fastest clip in nearly five years in March on a sharp rise in gas prices, government data showed Tuesday.
The country’s consumer price index gained 2.2% last month from a year earlier, accelerating from the previous month’s 1.9% rise, according to the data compiled by Statistics Korea. The March number marked the highest on-year gain since June 2012, Yonhap reported.
From a month earlier, the index stayed unchanged at 102.79 in March.
Core inflation, which excludes volatile oil and food prices, increased 1.7% compared with last year. The statistics office said rising gas prices at the pumps and utility bills pushed up the inflation, along with expensive fruits and vegetables.
Prices of gasoline and petroleum products advanced 14.4% last month from a year ago amid an upturn in global crude oil prices.
Gas prices at the pump jumped 12.4% on-year last month and those of diesel gained 18.2% on-year, while a 3.9% hike in natural gas rates also lent support to the monthly consumer price hike.
Also, prices of fresh fruit and vegetables jumped 7.5% in March from a year earlier following the winter season.
In particular, prices of tangerines surged 106.2% on-year last month, with those of cabbage and carrots soaring 91.5% and 71.8%, respectively.
“The steep inflation is expected to ease in the coming months as the pace of the global oil price hike slows down to some extent,” said Woo Young-jae, director of the price statistics division at the statistical bureau. “And the supply of agricultural products will expand with the spring season coming soon.”
The finance ministry also said there is limited possibility that the consumer prices have already entered a upside cycle, largely because of the slowing pace of oil price hikes.
The price of Dubai crude, South Korea’s benchmark, hovered around $51.2 per barrel in March, slightly down from $54.4 in February and $53.7 in January, according to separate ministry data.
“But still we have to check the fluctuation of oil prices and weather conditions that can create a drag on inflation,” the ministry said.
South Korea had suffered from low inflation over the past two years amid a low oil price trend. The consumer price index grew 0.7% and 1% in 2015 and 2016, respectively, failing to meet the central bank target of 2%.
