Korea: Inflation rises to eighth-month high in April
April 30, 2014
Consumer prices rose 0.06% over the previous month in April, which was below the 0.18% increase observed in March. The subdued print reflected that lower prices for food and non-alcoholic beverages, as well as for furnishing and household equipment, offset higher prices for recreation and culture.
Annual headline inflation rose from 1.3% in March to 1.5% in April, which matched market expectations. The reading represents the highest level since August 2013. The annual reading is still below the Central Bank's target range of between 2.0% and 4.0%. In April, annual average inflation stabilized at March's 1.2%.
Meanwhile, core consumer prices, which exclude more volatile items such as fresh food and energy, rose 0.18% over the previous month, which was down from the 0.29% increase recorded in March. Annual core inflation rose from 2.1% in March to 2.3% in April.
The Central Bank expects annual average inflation to be 2.3% in 2014, before rising to 2.8% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 2.3% in 2014, which is down 0.1 percentage points from last month's forecast. According to the panel, average inflation should reach 2.8% in 2015.
Author: Ricardo Aceves, Senior Economist