S Korea's CPI growth slows to 4.1% in May

10:45, June 01, 2011      

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South Korea's consumer prices rose at a slower pace in May, but remained higher than the central bank' s inflation target for five months in a row, a government report showed Wednesday.

Consumer price index (CPI) increased 4.1 percent in May from a year earlier, after gaining 4.2 percent in April, Statistics Korea said in a monthly report. The country's inflation eased due to slower price growth in agricultural and oil products, but it breached the Bank of Korea ( BOK)'s 4 percent ceiling for the fifth consecutive month in May. The BOK targets inflation at 2-4 percent in the mid-term.

The moderated inflation may deter the BOK from raising its key interest rate at the rate-setting meeting slated for June 10, but rising core consumer prices are expected to become a headache for the BOK's board members.

Core CPI, which excludes oil and agricultural goods, jumped 3.5 percent last month from a year earlier, following a 3.2 percent on-year rise in April, according to the report. It marked the highest level in 23 months since July 2009. Core consumer prices rose 0.5 percent on-month in May.

Prices for agricultural, dairy and fisheries goods increased 5.9 percent on-year in May, but they dropped by 4.7 percent on-month. Prices of manufactured products rose 5.9 percent on-year last month.

By items, pork prices gained 3.8 percent on-month in May, but prices for cabbage and onion plunged 56.7 percent and 24.8 percent on-month respectively, the report showed. Prices for gasoline and diesel fell 0.9 percent and 1.6 percent each in May from a month earlier.

The fresh food price index, a gauge of vegetables and fruits, rose 1.3 percent in May from a year earlier, but the index slipped 9 percent on-month.

The eased inflation came after the government's efforts to curb inflationary pressures by decreasing import taxes on some items, unloading stockpiles of agricultural products and cracking down on price-rigging in the corporate sector.

Source: Xinhua
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