Korea May inflation steady, core inflation eases

South Korea’s annual inflation held steady in May but core inflation dipped to an 18-month low, allowing policymakers to focus on dealing with the slowing growth in Asia’s fourth-largest economy.

The consumer price index in May rose 2.5 percent from a year earlier, Statistics Korea data showed on Friday, following annual gains of 2.5 percent in April and 2.6 percent in March. The index rose 0.2 percent in May from the previous month.

But annual core inflation, which strips off volatile food and fuel prices, eased to 1.6 percent in May from 1.8 percent in April to hit its lowest level since November 2010.

The results were in line the median forecasts in a Reuters poll of analysts. Forecasts for the annual rate ranged from 2.2 percent to 2.7 percent.

Fresh foods and oil products led gains in consumer prices in May, while lower prices for livestock items, childcare services and school lunches helped limit inflation, the statistics agency said in a statement.

Annual inflation averaged 2.8 percent for January-May, far lower than the 3.8 percent set for the same period of 2011 and compared with the central bank’s 3.2 percent forecast for the whole of this year.

The Bank of Korea has a target of keeping annual inflation at or close to 3 percent, although a range from 2 percent to 4 percent is regarded as acceptable.

http://www.reuters.com/article/2012/05/31/korea-economy-inflation-idUSL4E8GU03220120531

 

Category: Korea