By Kang Seung-woo
The inflation rate returned to the 4 percent level in November amid rising prices for manufactured goods, processed foods and public utilities, a government report said Thursday.
However, the annualized inflation rate is expected to be within the government’s target range of between 2 percent and 4 percent.
According to the latest figures from Statistics Korea, the nation’s consumer price index (CPI) climbed 4.2 percent last month from a year ago, up from a revised 3.6 percent year-on-year gain tallied in the previous month.
The November reading snapped the country’s streak of staying below 4 percent after it basked in the 3 percent mark for two straight months.
Asia’s fourth-largest economy, whose consumer prices rose from 3.4 percent in January to 4.7 percent in August, registered 3.8 percent and 3.6 percent year-on-year increases in September and October, respectively.
The data came as the statistics office had revised its calculating method that added or deleted items checked in a basket of consumer goods to better reflect actual prices. The new version adopted 2010 for the base year for the CPI instead of the previous 2005. Under the old system November’s consumer prices gained 4.6 percent from a year earlier.
Core inflation, which excludes volatile oil and farm product costs, increased 3.5 percent from a year earlier, a gain from the 3.2 percent year-on-year gain tallied in October.
The agency attributed the annual growth to rising prices of industrial goods and public utility prices.
Prices of industrial goods, which include processed food, soared 6.4 percent year-on-year, while electricity, water and gas prices jumped 7.4 percent.
Service sector prices gained 2.7 percent with farm and fishery product costs moving up 3.4 percent compared to a year earlier, but the fresh food price index fell 4.2 percent, with vegetable prices plunging 18.9 percent.
Entering this year, President Lee Myung-bak declared war on inflation, saying the government will try to contain consumer prices at the 3 percent level, but later raised the target band to 4 percent.
The office said that unless the CPI surpasses 4.6 percent in December, the inflation rate for this year will be contained below 4 percent.
“As the consumer price index last December rose sharply, this month’s inflation will not be that high,” said Yang Dong-hee, head of Statistics Korea’s price statistics department. “This year’s annual inflation is expected to remain at 4 percent based on the recalibrated CPI.”
With the revised calculating system, the nation’s inflation rate between January and November logged 4 percent, compared with 4.5 percent based on the old one.