South Korea's annual inflation accelerated modestly in February, boosted by a surge in fresh food prices over winter, but remains below levels that would have implications for monetary policy. Statistics Korea said the consumer price index rose 1.4 percent in February from a year ago, faster than the 1.0 percent gain recorded in January and slightly above the 1.2 percent rise expected in a Reuters survey.
Still, benchmark inflation has held below the Bank of Korea's 2 percent target since October last year, making inflation a hurdle to any monetary policy tightening this year. A sub-index for fresh food costs jumped 4.3 percent on-year as fruits and vegetable prices rose steeply due to cold winter weather. Prices of strawberries jumped 23.2 percent, while prices for pumpkin and rice surged 25.5 percent and 21.1 percent respectively.
"A cold wave throughout February pushed up the prices of fresh vegetables while consumer prices were largely stable. Oil prices are ticking up again and supporting prices of industrial products," a Statistics Korea official said. Local petroleum prices gained 3.0 percent from a year earlier, Statistics Korea said, raising prices for petrochemical and other industrial goods for local consumers.
Global oil prices are on the rise on expectations for robust oil demand growth and concerns that output from Opec producers would grow at a much slower pace in coming years. Month-on-month inflation was 0.8 percent, slightly above the poll's forecast of a 0.5 percent rise.
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