SEOUL, August 04 (AJP) - South Korea's consumer inflation slowed below 3 percent for the first time in three months in July as softer imported energy prices and subdued consumer demand offset persistent underlying price pressures, government data showed Tuesday.
The consumer price index stood at 119.77, up 2.8 percent from a year earlier, slowing from 3.2 percent in June, according to the Ministry of Data and Statistics.
The KOSPI opened Tuesday 1.3 percent higher and the KOSDAQ 3.7 percent, while the Korean won weakened to 1,432.50 won. Bond data are yet to be posted.
The moderation was driven largely by electricity and petroleum product prices, which fell 11.0 percent and 5.5 percent, respectively, from the previous month. Government-imposed fuel price caps helped reduce headline inflation by about 0.3 percentage point, according to a separate finance Ministry statement.
The living necessities index, which tracks frequently purchased goods and services, slowed sharply to 2.5 percent from 3.4 percent in June, reflecting weaker household spending as consumers continued to grapple with elevated prices.
Underlying inflation, however, remained firm. Core inflation, which excludes food and energy, rose 0.4 percent from the previous month and 2.6 percent from a year earlier, accelerating from 2.5 percent in June to its highest level since December 2023.
Service prices increased 2.6 percent from a year earlier, while personal service prices rose 3.5 percent. Personal services excluding dining out climbed 4.1 percent, suggesting higher import costs continued to filter through to consumers.
Personal services contributed 1.19 percentage points to headline inflation, the largest contribution among the major expenditure categories
Despite their monthly decline, petroleum product prices remained 15.5 percent higher than a year earlier, while transport costs climbed 7.7 percent, the sharpest increase among the major spending categories.
The finance Ministry warned that a statistical base effect from temporary mobile-phone fee discounts a year earlier could add about 0.8 percentage point to August inflation. It also cited renewed uncertainty in the Middle East as an upside risk to prices.
Copyright ⓒ Aju Press All rights reserved.