Korea: Inflation accelerates in February, spurred by January's minimum wage increase
March 6, 2018
Consumer prices increased 0.8% in February from the previous month, according to the National Statistics Office of Korea. The result, which followed the 0.4% month-on-month increase recorded in January, was the highest in over one year and was spurred by higher prices for food and non-alcoholic beverages, and recreation and culture. Market analysts were expecting a smaller 0.5% increase in February.
Inflation hit 1.4% in February, surpassing market expectations of 1.2% and accelerating from January’s 1.0%. The acceleration in February, which was largely caused by a feed-through effect from the minimum wage hike in January, means that inflation is now closer to the Bank of Korea’s 2.0% target rate.
The core inflation rate, which excludes fresh food and energy prices, accelerated to 1.3% in February from January’s 1.2%. Annual average inflation, meanwhile, dipped to 1.8% in February from 1.9% in January.
Author: Edward Gardner, Economist