(2nd LD) S. Korea's consumer prices rise 2.7 pct in May

(ATTN: ADDS details, gov't assessment in last 2 paras)
SEOUL, June 1 (Yonhap) -- South Korea's consumer prices grew at a relatively
stable pace in May, easing anxiety that inflationary pressure could affect the
government's efforts to bolster growth, a report showed Tuesday.
According to the report by Statistics Korea, the consumer price index rose 2.7
percent last month from a year earlier, remaining under the 3 percent mark for a
fourth consecutive month. The index, however, was higher than the previous
month's 2.6 percent growth.
Core inflation, excluding volatile oil and food prices, gained 1.6 percent from a
year ago, a slight advance from the 1.5 percent tallied in the previous month,
the report showed.
The price hike remains under the central bank's target inflation range of 2-4
percent for three years until 2012.
The consumer price index has been closely watched as the government and central
bank have maintained economy-boosting macroeconomic and monetary measures. Price
hikes could pressure authorities to roll back stimulus measures so as to avoid
asset bubbles.
South Korea's economy is making a faster-than-expected rebound from the global
downturn. The Korea Development Institute, a state-run think tank, recently
upgraded its 2010 growth outlook for Korea to 5.9 percent from 5.5 percent, a
projection higher than the government's 5 percent forecast.
The government says that it will continue its current macroeconomic policy stance
"for some time," while the BOK maintains its key interest rates at a record low
of 2 percent for the 15th consecutive month.
Meanwhile, the finance ministry said in a separate report that the latest index
shows that prices are stabilizing and expects its hike to remain under the 3
percent mark in June as well, though it cited uncertainties over international
raw material prices as a volatility-causing factor.
kokobj@yna.co.kr
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