SEOUL (Reuters) – South Korea’s consumer prices in December rose 5.0% from a year earlier, official data showed on Friday, matching market expectations and the pace seen in November.
The consumer price index (CPI) was 0.2% higher than in November, when it showed a 0.1% monthly decline, according to Statistics Korea data. The median forecasts from a Reuters poll were for the CPI to be up 0.1% on the month and 5.0% on a year before.
A breakdown of the data showed prices of agricultural products had been 1.6% lower than in December 2021. But utility prices jumped 23.2% and private service prices 6.0%, keeping the overall annual inflation rate high. The annual rate peaked at 6.3% in July.
Both the central bank and government have said that inflation will ease only gradually and that there is huge uncertainty about the near-term inflation path.
After the data release, the Bank of Korea said in a statement it expected annual inflation to hover around 5% through early 2023, with both upside and downside risks.
Separately, the finance ministry said it would continue efforts for price stabilisation, citing price adjustments at the beginning of the new year and increased demand during Lunar New Year holidays as risk factors.
The Bank of Korea has raised its policy interest rate by 275 basis points since August 2021 and is widely expected to implement just one more rise in the current cycle, in early 2023.
The core CPI, which excludes volatile food and energy prices, was up 4.1% in December on a year earlier, after November’s annual rise of 4.3%, the fastest in nearly 14 years. The fall in the core annual rate in December was the first since November 2021.
The average level of the CPI for all of 2022 was 5.1% higher than a year before, sharply accelerating from the 2.5% rise seen in 2021. No year-average inflation rate has been so high since 1998.
(Reporting by Jihoon Lee; Editing by Diane Craft and Bradley Perrett)