South Korea’s consumer prices jumped 2.2 percent in March on year, the fastest pace in nearly five years due to spike in the supply end mostly in service charges and petroleum prices from higher oil and fresh food costs.

According to data released by Statistics Korea Tuesday, the nation’s consumer price index (CPI) rose 2.2 percent last month from a year earlier. The last time it hit the level was in June 2012.

Last month’s headline inflation exceeded the central bank’s inflation target of around 2 percent, but won’t likely persuade the Bank of Korea to consider the option of raising the base rate from current record-low of 1.25 percent in near future out of inflationary concern as the cause stems from supply end not increased demand.

Lee Ju-yeol, BOK governor, earlier this month vowed to keep monetary policy “loose” regardless of the tightening move in the U.S., arguing the recovery pace in domestic demand and prices remain too modest to demand shift in policy.

Prices of agricultural, livestock and fishery products gained 5.8 percent in March from a year earlier, sending the headline index up by 0.46 percentage points.

Service prices climbed 2.1 percent on a 19.4 percent jump in insurance premiums and a 4.5 percent rise in apartment maintenance fees. It contributed to the overall inflation by 1.16 percentage point.

Petroleum-related prices rose 14.4 percent on year, marking the highest on-year increase since November 2011, bumping up the benchmark CPI by 0.59 percentage points.

Transport fares rose 6.4 percent. Fresh food prices accelerated 7.5 percent with egg prices 43.1 percent and pork prices higher due to supply shortage as the result of culling from infectious disease outbreak.

The core inflation excluding oil and farm produces gained 1.4 percent in March from a year ago. The CPI without food and energy, the standard by the Organization for Economic Cooperation and Development (OECD), increased 1.7 percent.

Prices for living necessaries rose 2.8 percent from a year earlier.

By Kim Gyu-sik

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]