S. Korea's inflation outstrips OECD average

SEOUL, March 17 (Yonhap) -- South Korea's inflation grew at a faster pace than
the average for member nations of the Organization for Economic Cooperation &
Development (OECD) in January on higher crude prices and the weakening local
currency, data showed Tuesday.

According to the data provided by the OECD and the government, South Korea's
inflation jumped 3.7 percent in January, compared with an average of 1.3 percent
for the group's 30 member nations. The figure was the fourth highest among the
member countries along with Australia and Slovakia.
The price increase also compares with an average of 0.5 percent that the Group of
seven rich nations including the U.S., Japan and France posted during the month,
the data showed.
The Seoul government attributed the higher-than-average inflation to a pick-up in
crude prices and the slide in the nation' currency, which drove up the overall
commodity costs. South Korea is the world's fourth-largest oil importer.
Iceland, which received a bailout from the International Monetary Fund last year,
topped the list with an 18.6 percent price climb, followed by Turkey at 9.5
percent. Mexico came next with 6.3 percent, the report showed.
Most advanced nations saw price stabilization with some of them worrying that
they could face deflation as a result of a protracted economic slowdown.
The U.S., the world's largest economy, saw its inflation plunge to zero percent
from 5.6 percent in July last year. Inflation for Japan, the world's
second-largest, also fell to zero from 2.3 percent over the same period.
According to the latest data by the Seoul government, South Korea's consumer
prices jumped 4.1 percent in February from a year earlier, accelerating from a
3.7 percent on-year advance the previous month.
This marked the first upturn in seven months since inflation reached a 10-year
high of 5.9 percent in July last year. Experts expect the prices to grow further
given the weakening currency value, which has lost over 12 percent against the
U.S. dollar so far this year.
Higher inflation drives consumers to scale back spending, which could make things
worse for the local economy already struggling with slumping domestic consumption
and exports.
To kick-start the economy, the government has unveiled a raft of stimulus
measures including tax cuts and additional fiscal spending. Inflationary pressure
could add to concerns among policymakers, who are pushing for expansionary fiscal
and monetary measures, observers say.
kokobj@yna.co.kr
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