SEOUL, November 3 (AJP) - South Korea's consumer inflation remained elevated at 2.8 percent in October, as core inflation and service prices continued to rise steadily despite a sharp decline in agricultural prices and tentative signs of a broader recovery in consumption.
Consumer prices rose 2.8 percent from a year earlier, down 0.1 percentage point from 2.9 percent in September and 0.3 percentage point from 3.1 percent in August, according to the Ministry of Data and Statistics. The index rose 0.2 percent from the previous month.
Underlying inflation showed little further easing. Core inflation excluding food and energy remained at 2.8 percent, unchanged from September, while a separate measure excluding agricultural and petroleum products edged up to 2.8 percent from 2.7 percent.
"October consumer prices continued to rise at a high rate, led by personal services and durable goods, despite a slight easing from improved supply conditions for agricultural products," Bank of Korea (BOK) Deputy Governor Lee Jiho said after a price-monitoring meeting Tuesday.
Processed food inflation accelerated to 2.9 percent from 2.1 percent in September, while durable-goods prices rose 4.8 percent, according to the BOK. The central bank said accumulated cost pressures continued to show up in travel and dining services as well as electronic products.
The pressure was visible in everyday expenses. Diesel prices jumped 19.7 percent and gasoline rose 11.6 percent from a year earlier, while dining-out prices increased 2.9 percent.
Price increases were also pronounced in consumer electronics. Computer prices surged 26.2 percent from a year earlier, while mobile phone prices climbed 10.8 percent.
Agricultural prices, by contrast, fell 7.5 percent, helping hold down headline inflation. Fresh food prices dropped 6.2 percent, with fresh vegetables down 11.3 percent and fresh fruit falling 8.6 percent.
The living-cost index, which tracks frequently purchased goods and services, rose 2.6 percent from a year earlier. Food prices increased 1.5 percent, while nonfood prices gained 3.2 percent. Transport costs rose 6.8 percent and restaurant and accommodation prices increased 3.0 percent.
The BOK said the living-cost index edged up from 2.5 percent in September partly as processed food prices accelerated, even as lower farm prices helped restrain the headline consumer price index.
The Bank of Korea (BOK) has said accumulated cost pressures and gradually strengthening demand-side pressures are likely to keep inflation above its 2 percent target for some time.
The central bank expects consumer inflation to remain in the high-2 percent range in November, though the pace will depend partly on global oil prices. It said uncertainty surrounding the Middle East, the pass-through of cost shocks and growing demand-side pressures could keep price increases elevated.
One-year inflation expectations among consumers remained at 2.7 percent in October, unchanged from August and September, according to the BOK.
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