1st LD: S.Korea's headline inflation hovers below 1 pct for 5 months
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E-mail Xinhua, June 4, 2019
SEOUL, June 4 (Xinhua) -- South Korea's headline inflation hovered below 1 percent for five straight months through May on lower price for vegetable and oil product, a government report showed Tuesday.
The consumer price index stood at 105.05 in May, up 0.7 percent from a year earlier, according to Statistics Korea.
The consumer price inflation stayed below 1 percent for five months in a row. The inflation recorded 0.8 percent in January, 0.5 percent in February, 0.4 percent in March and 0.6 percent in April each.
It marked the first time since 2015 that the inflation remained below 1 percent for the fifth consecutive month.
The low inflation reduced pressure on the Bank of Korea (BOK) to hike rates. The BOK froze the benchmark interest rate at 1.75 percent last week, refraining from altering the rate for six straight months.
The BOK raised the target rate by 25 basis points to the current level in November last year, after lifting it to 1.50 percent from an all-time low of 1.25 percent a year earlier.
The country's real gross domestic product (GDP), adjusted for inflation, contracted 0.4 percent in the January-March quarter from the previous quarter, but the record-breaking household debt made it difficult for the BOK to cut the policy rate.
Price for agricultural, livestock and fishery products gained 1.2 percent in May from a year earlier, raising the overall headline inflation by 0.09 percentage points. Livestock price gained 2.6 percent.
Vegetable price tumbled 9.9 percent last month, pulling down the inflation by 0.15 percentage points. The fishery product price shed 1.3 percent, dragging down the overall inflation by 0.02 percentage points.
Price for industrial products added 0.3 percent in May from a year ago, lifting the consumer price inflation by 0.09 percentage points. It was the first rebound in five months.
Oil product price declined 1.7 percent last month, lowering the headline inflation by 0.08 percentage points. It was attributed to cheaper global crude oil.
Services price rose 0.8 percent in May, pulling up the overall inflation by 0.45 percentage points. Public service price fell 0.2 percent, but private service price advanced 1.5 percent last month. Enditem
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