S.Korea's headline inflation hits 13.5-year high on soaring energy price

SEOUL, May 3 (Xinhua) -- South Korea's headline inflation hit the highest in 13 and a half years last month due to soaring energy price, statistical office data showed Tuesday.

The consumer price index (CPI) stood at 106.85 in April, up 4.8 percent from the same month last year, according to Statistics Korea.

It marked the fastest increase since October 2008, hovering above 4 percent for the second straight month.

The headline inflation surpassed the Bank of Korea (BOK)'s mid-term inflation target of 2 percent for 13 months in a row.

To tackle runaway inflation, the BOK hiked its policy rate by a quarter percentage point to 1.50 percent after raising the rate by 25 basis points in January.

The April CPI was driven by expensive oil products, the price of which lifted the overall inflation by 1.48 percentage points.

Oil products price surged 34.4 percent in April from a year earlier. Prices for gasoline and diesel jumped 28.5 percent and 42.4 percent respectively.

Dubai crude, South Korea's benchmark, averaged 102.82 U.S. dollars per barrel in April, up 63 percent from a year earlier.

Price for processed food such as bread went up 7.2 percent last month amid a higher global price for grain.

Price for industrial products, including oil products and processed food, picked up 7.8 percent in April from a year ago.

Price for agricultural, livestock and fishery products rose 1.9 percent in April on higher livestock price.

Prices for imported beef soared 28.8 percent, and pork price gained 5.5 percent. Grape price jumped 23.0 percent, but those for green onion and apple declined in double figures.

Price for electricity, natural gas and tap water increased 6.8 percent in April on a yearly basis owing to higher energy cost.

Private services price advanced 4.5 percent on higher eating-out cost, caused by the food ingredients price hike.

Expense for dining-out soared 6.6 percent in April, recording the highest growth in 24 years since April 1998.

Public services price added 0.7 percent in April, after climbing 0.6 percent in the prior month.

Housing rent, including Jeonse and monthly rent, moved up 2.9 percent last month.

Jeonse is South Korea's unique contract between two households where a landlord grants a two-year residential right to a tenant, who in turn lends a certain amount of money, or deposit, to the landlord.

The livelihood items index, which gauges the price for daily necessities, spiked 5.7 percent in April from a year ago, logging the highest since August 2008.

The fresh food index, which measures the price for fish, shellfish, fruit and vegetable, was up 1.0 percent last month.

Both supply-side and demand-side inflationary pressures mounted on higher energy cost and the domestic demand recovery from the COVID-19 pandemic.

Core consumer price, which excludes volatile agricultural and oil products, advanced 3.6 percent in April, recording the highest since December 2011.

The OECD-method core price, which excludes volatile energy and food cost, added 3.1 percent last month.