Monthly Inflation Hits 20-month High of 4.1 Pct. in October

Consumer inflation last month reached its fastest pace in nearly two years, exceeding the Bank of Korea’s target range of 2 to 4 percent.

Statistics Korea said Monday that consumer prices rose 4.1 percent last month year-on-year, the first time for the figure to exceed 4 percent in 20 months. Prices of fresh produce surged 49.4 percent, the largest jump since the statistic`s inception in 1990.

Inflation had remained below 3 percent from February to August this year before rising to 3.6 percent in September.

Among fresh produce, the price of radish skyrocketed 275.7 percent and that of cabbage 261.5 percent from a year earlier. The price hike for green onions hit 145.5 percent, that of tomatoes 114.4 percent, and that of garlic 102.5 percent.

The prices for living necessities including food and beverages rose 4.8 percent year-on-year and 0.3 percent month-on-month. Prices excluding those of agricultural and oil products gained 1.9 percent from a year ago and remained flat from a month earlier.

By sector, the prices of agricultural, fisheries and livestock products posted the highest increase of 22.7 percent, with that of agricultural products rising 37 percent and that of fisheries 10.6 percent. Service prices rose 2 percent, with public utility charges going up 2.3 percent and those of individual services increasing 2.2 percent.

Vegetable prices began a downward path from mid-October, however. Average vegetable prices last month were higher than in the same month last year, when prices were particularly high, but rose little from September.

Cabbage prices rose 30.2 percent from a month earlier, while those of radish went up 36.4 percent and those of green onions were raised 20.7 percent. Yet spinach prices fell 50 percent and those of lettuce dropped 48.7 percent.

Lee Eok-won, head of the consumer price policy team at the Strategy and Finance Ministry, said, “Like last month, a shortage of farm, fisheries and livestock products pushed up consumer inflation in October. Yet those prices turned downward from mid-October and overall inflation will likely stabilize at the upper 3-percent range in November.”

hyejin@donga.com