Consumer Prices Rise at Fastest Clip in 9 Years
03 June, 2021
Consumer prices increased 2.6 percent on-year in May, according to Figures Korea on Wednesday, fueling fears of inflation.
It was the largest increase since April 2012 and faster compared to the government's projection of two percent.
Refreshing foods and petrochemicals led the increase. Rates of agricultural and livestock products heightened 12.1 percent as supplies were damaged by poor crops and bird flu. Petrochemicals prices surged 23.3 percent, the biggest rate of growth since August 2008.
The rising prices reflected the financial recovery. Exports surged 45.6 percent on-year in May, the best rate in 32 years, and retail revenue rose 2.3 percent on-month.
Overseas oil prices, which surged to a two-year most of US$70 a barrel, are another sign that the global economy is returning to normal.
THE LENDER of Korea said it could not rule out "higher-than-expected inflation pressures." Inflation could accelerate an interest rate hike, which would boost the burden on households that contain applied for W1.765 quadrillion worth of loans (US$1=W1,114).
Gurus warn that the chance of rising inflation should be monitored continually. Kim So-young at Seoul National University explained, "Even if items of agricultural and livestock goods stabilize, inflation could upsurge in the second 50 percent due to rising intake fueled by pent-up demand."
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