Inflation Growth Moderates to 3.9%
By Lee Hyo-sik
Staff Reporter
Consumer prices grew at a slower pace in March, with falling oil and other raw material prices cutting overall costs of various goods and services here. But prices of agricultural and livestock products surged on declining supplies as a result of the prolonged nationwide drought.
According to the National Statistical Office (NSO) Wednesday, consumer prices jumped 3.9 percent last month from a year earlier, down from a 4.1 percent gain in February. Inflation growth in general has shown a downward curve after peaking at 5.9 percent in July 2008, when international crude prices soared to close to $150 per barrel.
Seasonally adjusted consumer prices increased 0.7 percent in March from a month earlier for the second consecutive month.
The cost of living index, consisting of foods and other daily necessities, rose 3.1 percent from a year ago, down from a 3.3 percent increase in February. Core inflation, which excludes volatile food and fuel prices from the consumer price index, rose 4.5 percent.
But prices of vegetables and other fresh food items soared 10.8 percent year-on-year, much higher from a 1.4 percent increase in February.
``Consumer price growth has been slowing since last summer, as oil and other imported commodity prices fell sharply on sluggish demand amid the global economic slowdown. But seasonal factors, including a prolonged drought gripping many parts of the nation, have pushed up prices of agricultural produce, including tangerines and onions,'' an NSO official said.
The Ministry of Strategy and Finance projected that inflation will likely continue to head south in coming months because of the strengthening of the Korean won against the dollar and the continuing economic downturn.
``But we will closely monitor changes in the prices of agricultural and fisheries products at home and those of oil and other commodities abroad,'' the ministry said.
Prices of manufactured goods increased 4.7 percent last month from a year ago, while prices of agricultural, fisheries and livestock goods rose 5.8 percent. Costs of onions jumped 107.2 percent, while prices of pork and tangerines went up 28.6 percent and 56.2 percent, respectively.
Consumer prices climbed 4.7 percent in 2008 from a year earlier, up from a 2.5 percent gain in 2007. The increase was the highest since 1998, when prices soared 7.5 percent. Basic living costs surged that year, following the Asian financial crisis, as the won depreciated sharply against the dollar and other currencies, raising the price of oil and other imported commodities.