SEOUL (Reuters) -South Korea’s consumer inflation ticked up in July on supply-side pressures after weakening for three straight months, official data showed on Friday, coming in slightly higher than market expectations.
The consumer price index (CPI) in July rose 2.6% from the same month a year earlier, after hitting an 11-month low of 2.4% in June, while economists in a Reuters survey had expected a gain of 2.5%.
The consumer price rise was in line with the finance minister’s comments last week that inflation might temporarily pick up due to abnormal weather conditions and base effects before stabilising from August.
Last month, the Bank of Korea opened the door for rate cuts after holding interest rates steady at a 15-year high of 3.50% for the 12th straight meeting, but the board was divided over when to act.
The CPI rose 0.3% on a monthly basis, after falling 0.2% the previous month, according to Statistics Korea. That was the fastest rise in five months and a little higher than economists’ expectations for a median 0.25% increase.
Prices of petroleum products climbed 3.3% over the month, and agricultural products gained 0.9%, as vegetable prices jumped 6.3%.
Annual core inflation, which excludes volatile food and energy items, was steady at 2.2% for the third straight month.