Roundup: S.Korea's headline inflation slows in November

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SEOUL, Dec. 2 (Xinhua) -- South Korea's headline inflation slowed last month owing to slower price increases in oil products and farm goods, statistical office data showed Friday.

The consumer price index (CPI) stood at 109.10 in November, up 5.0 percent from a year ago, according to Statistics Korea.

After peaking at 6.3 percent in July, consumer price inflation had been on the decline with 5.7 percent in August and 5.6 percent in September, but headline inflation stayed above 5 percent for the seventh consecutive month.

The headline inflation also topped the Bank of Korea (BOK)'s mid-term target of 2 percent for 20 months in a row.

To counter the still high inflation, the BOK began to hike its benchmark interest rate in August last year, raising the rate from a record low of 0.50 percent to 3.25 percent.

Expectations ran high for the BOK's further rate hikes as the U.S. Federal Reserve took another giant step last month by lifting its key rate by 0.75 percentage points to a range of 3.75-4.00 percent.

The lower inflation in November was driven by slower price gains in farm goods and oil products despite the sharp growth in utility costs.

Price for agricultural, livestock and fishery products added 0.3 percent in November from a year earlier, after soaring 5.2 percent in October.

Agricultural products price slumped 2.0 percent on the vegetable price fall, but those for livestock and fishery goods increased 1.1 percent and 6.8 percent respectively.

Price for industrial products, including oil products, gained 5.9 percent in November, slowing down in recent months with increases of 8.9 percent in July, 7.0 percent in August, 6.7 percent in September and 6.3 percent in October.

Oil products price went up 5.6 percent in November, after advancing 39.6 percent in June, 35.1 percent in July, 19.7 percent in August, 16.6 percent in September and 10.7 percent in October.

Diesel price spiked 19.6 percent last month, but gasoline price retreated 6.8 percent, keeping a downward trend for the second successive month.

Processed food price climbed 9.4 percent in November after rising 9.5 percent in the previous month.

Pent-up demand, caused by the lifting of all the anti-COVID-19 measures except an indoor mask mandate, boosted services prices, especially eating-out costs.

Private services price, including eating-out costs, increased 6.2 percent in November on a yearly basis, slightly down from a growth of 6.4 percent in the prior month.

Expense for dining out jumped 8.6 percent, and insurance services cost advanced 14.9 percent. Public services price added 0.8 percent last month, unchanged from the previous month.

Price for electricity, natural gas and tap water surged 23.1 percent in November from a year earlier, the fastest rise since relevant data began to be compiled in 2010.

Electricity bill gained 18.6 percent, while natural gas charges and heating costs soared over 30 percent.

Housing rent, including Jeonse and monthly rent, climbed 1.6 percent last month.

Jeonse is South Korea's unique contract between two households where a landlord grants the two-year residential right to a tenant, who in turn lends a certain amount of money, or deposit, to the landlord.

The livelihood items index, which gauges price for daily necessities, rose 5.5 percent in November from a year ago, after growing 6.5 percent in the previous month.

The fresh food index, which measures the price of fish, shellfish, fruit and vegetable, added 0.8 percent in November, sharply down from an increase of 11.4 percent in October.

Demand-side inflationary pressures mounted on pent-up demand, caused by the moderated anti-virus measures.

Core consumer price, which excludes volatile agricultural and oil products, picked up 4.8 percent in November on a yearly basis, the highest in over 13 years since February 2009.

The OECD-method core price, excluding volatile energy and food costs, gained 4.3 percent last month, the highest since December 2008. Enditem

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