*Updated with additional information and market response
SEOUL, May 6 (AJP) — South Korea’s inflation accelerated to a 21-month high in April as a monthlong blockade of the Strait of Hormuz drove up imported fuel costs and price pressure from gas pumps to dining tables.
According to data released by the Ministry of Data and Statistics (MDAS) on Wednesday, the consumer price index (CPI) rose 0.5 percent from March and 2.6 percent from a year earlier, up from 2.2 percent in March. It was the fastest annual gain since July 2024, when inflation stood at 2.7 percent.
The latest data reinforced concerns at the Bank of Korea that inflation could drift toward the 3 percent range if Middle East tensions persist and supply disruptions continue to pressure energy imports.
The surge was led largely by petroleum-linked industrial goods. Industrial product prices rose 3.8 percent from a year earlier, accelerating from 2.7 percent in March.
Petroleum prices alone soared 21.9 percent on year and 7.9 percent from the previous month, contributing 0.84 percentage point to headline inflation.
The increase reflected both the impact of the Middle East war and a low base from last year. Dubai crude averaged $105.7 per barrel in April, compared with $67.7 a year earlier. Domestic gasoline prices rose to 1,986 won per liter from 1,647 won a year earlier, while diesel prices climbed to 1,979 won from 1,513 won.
Among individual items, gasoline prices jumped 21.1 percent from a year earlier, while diesel prices surged 30.8 percent. Kerosene prices climbed 18.7 percent.
Transportation recorded the steepest increase among major spending categories, rising 9.7 percent from a year earlier and 3.4 percent from March, contributing nearly one percentage point to overall inflation.
Rising energy costs also spilled over into travel-related services. International airfare prices climbed 15.9 percent from a year earlier, while overseas package tour prices rose 11.5 percent, reflecting higher transportation and fuel-related costs amid prolonged instability in Middle Eastern shipping routes.
Service-sector inflation remained elevated. Personal services prices rose 3.2 percent from a year earlier, with dining-out prices up 2.6 percent and other personal services up 3.5 percent.
Agricultural prices continued to stabilize after last year’s weather-driven spikes. Agricultural, livestock and fisheries products fell 0.5 percent from a year earlier, while fresh food prices dropped 6.1 percent. Vegetable prices plunged 12.7 percent, led by declines in onions, radishes and napa cabbage.
Still, some food items continued to rise sharply. Rice prices surged 14.4 percent from a year earlier, while pork, eggs and imported beef also posted gains.
The Living Necessities Price Index, which tracks frequently purchased goods and services, climbed 2.9 percent on year in April, up from 2.3 percent in March. Excluding food, the index jumped 3.9 percent, underscoring the growing burden of energy-related costs on households.
Core inflation remained relatively stable. Both the index excluding food and energy and the index excluding agricultural products and petroleum rose 2.2 percent from a year earlier, unchanged from March, highlighting how heavily the headline figure was driven by oil prices.
“With uncertainty remaining due to the Middle East war and increased volatility in global oil prices, the government will make all-out efforts to stabilize prices felt by consumers,” the Ministry of Finance and Economy said in a statement. “We will prioritize petroleum products while closely managing items closely tied to people’s livelihoods through the price task force.”
Markets largely shrugged off the ominous inflation data. As of 10:10 a.m. Wednesday, the benchmark KOSPI was up 5.6 percent to break the unchartered 7,300 mark, while the Korean won recovered to pre-war levels around 1,450 against the U.S. dollar.
Copyright ⓒ Aju Press All rights reserved.