ID :
48770
Tue, 03/03/2009 - 18:51
Auther :
Shortlink :
https://www.oananews.org//node/48770
The shortlink copeid
S. Korea's consumer prices rise 4.1 pct in Feb.
(ATTN: RECASTS lead; ADDS details from 3rd para)
SEOUL, March 3 (Yonhap) -- South Korea's consumer prices grew at a faster pace in
February than the previous month on increased fuel prices and higher import costs
due to the weakening local currency, a government report showed Tuesday.
According to the report by the National Statistical Office, the consumer price
index rose 4.1 percent last month from a year earlier, accelerating from a 3.7
percent on-year advance the previous month. From January, consumer prices rose
0.7 percent.
This marked the first upturn in seven months since inflation reached a 10-year
high of 5.9 percent in July last year. Core inflation excluding volatile oil and
food prices stood at 5.2 percent in February, unchanged from a month earlier.
"The price hike was faster than expected," said Jeon Min-kyu, an analyst at Korea
Investment & Securities. "Increases in the price of oil products and the plunge
in the local currency seem to have contributed to the hike."
Gasoline prices jumped nearly 11 percent in February from a month earlier,
driving the overall price level higher. Diesel prices also rose 1.3 percent over
the same period, according to the report.
On Monday, the won plunged to an 11-year low against the greenback, with its
value falling nearly 20 percent since the start of this year amid spreading
concerns over a fresh financial crisis. A weak currency puts upward pressure on
inflation by making imports costlier.
High inflation drives consumers to scale back spending, which could make things
worse for the local economy already struggling with slumping domestic consumption
and exports.
The government has unveiled a raft of stimulus measures, which include tax cuts
and increased fiscal spending. Finance Minster Yoon Jeung-hyun said earlier that
the government will submit an extra budget plan to the National Assembly this
month for approval.
To help bolster the economy, the Bank of Korea, the nation's central bank,
slashed its key interest rate in February by half a percentage point to a record
low of 2 percent, the sixth cut in four months. Since October, the bank has
trimmed the rate by a combined 3.25 percentage points.
The South Korean government expects the economy, Asia's fourth-largest, will
contract 2 percent this year, compared with a 2.5 percent expansion in 2008.
Growing inflationary pressure, however, will likely add to the concerns among
policymakers as many other indicators are already pointing to a
deeper-than-expected economic downturn, analysts said.
"Inflation has not been a major concern for the government in past months as it
seemed to be stabilizing," Jeon said. "The latest inflation data could come as a
headache for policymakers who have to push for expansionary fiscal and monetary
polices down the road."
kokobj@yna.co.kr
(END)
SEOUL, March 3 (Yonhap) -- South Korea's consumer prices grew at a faster pace in
February than the previous month on increased fuel prices and higher import costs
due to the weakening local currency, a government report showed Tuesday.
According to the report by the National Statistical Office, the consumer price
index rose 4.1 percent last month from a year earlier, accelerating from a 3.7
percent on-year advance the previous month. From January, consumer prices rose
0.7 percent.
This marked the first upturn in seven months since inflation reached a 10-year
high of 5.9 percent in July last year. Core inflation excluding volatile oil and
food prices stood at 5.2 percent in February, unchanged from a month earlier.
"The price hike was faster than expected," said Jeon Min-kyu, an analyst at Korea
Investment & Securities. "Increases in the price of oil products and the plunge
in the local currency seem to have contributed to the hike."
Gasoline prices jumped nearly 11 percent in February from a month earlier,
driving the overall price level higher. Diesel prices also rose 1.3 percent over
the same period, according to the report.
On Monday, the won plunged to an 11-year low against the greenback, with its
value falling nearly 20 percent since the start of this year amid spreading
concerns over a fresh financial crisis. A weak currency puts upward pressure on
inflation by making imports costlier.
High inflation drives consumers to scale back spending, which could make things
worse for the local economy already struggling with slumping domestic consumption
and exports.
The government has unveiled a raft of stimulus measures, which include tax cuts
and increased fiscal spending. Finance Minster Yoon Jeung-hyun said earlier that
the government will submit an extra budget plan to the National Assembly this
month for approval.
To help bolster the economy, the Bank of Korea, the nation's central bank,
slashed its key interest rate in February by half a percentage point to a record
low of 2 percent, the sixth cut in four months. Since October, the bank has
trimmed the rate by a combined 3.25 percentage points.
The South Korean government expects the economy, Asia's fourth-largest, will
contract 2 percent this year, compared with a 2.5 percent expansion in 2008.
Growing inflationary pressure, however, will likely add to the concerns among
policymakers as many other indicators are already pointing to a
deeper-than-expected economic downturn, analysts said.
"Inflation has not been a major concern for the government in past months as it
seemed to be stabilizing," Jeon said. "The latest inflation data could come as a
headache for policymakers who have to push for expansionary fiscal and monetary
polices down the road."
kokobj@yna.co.kr
(END)
