SEOUL- South Korea’s consumer prices rose at their fastest pace in more than a decade in March as the Ukraine war fuelled surging energy and commodity costs, adding pressure to the central bank ahead of its rate decision meeting next week.
The consumer price index (CPI) for March rose 4.1 percent from a year earlier, official data showed on Tuesday, the fastest increase since December 2011 and outpacing a 3.8 percent rise tipped in a Reuters poll.
Core inflation, which excludes volatile food and energy costs, also jumped 2.9 percent from a year earlier, staying at the rate seen in February. The sustained rise in core prices shows surging fuel and raw materials costs are feeding through to consumers.
“We do not see the upward trend in inflation slowing significantly next month,” said EoWoon-sun, a senior Statistics Korea official. He added that global supply disruptions could worsen amid the Russia-Ukraine war and prices for personal services such as eating out continued to rise.
The breakdown of data showed the cost of petroleum surged 31.2 percent, while that of housing rentals and outdoor dining increased 2.0 percent and 6.6 percent, respectively, on year. The cost of electricity, gas and water added 2.9 percent.
That puts the Bank of Korea’s (BOK) monetary policy board under pressure to raise its benchmark interest rate even higher. It has hiked rates a total 75 basis points since the pandemic.
