South Korea's consumer prices stayed at a 1 percent range for four straight months, the first since 1999, as pork prices fell amid the strong won and low growth.
Consumer prices rose 1.4 percent in February from a year earlier after gaining 1.5 percent in the prior month, hovering at the 1 percent level for the fourth consecutive month, Statistics Korea said in a statement on Monday.
It was the first time since 1999 the consumer price inflation stays below 2 percent for four months in a row. The February reading was lower than the South Korean central bank's inflation target band of 2.5-3.5 percent.
"Consumer inflation will be cured below the Bank of Korea (BOK) target throughout the year, which means the inflation issue will remain neutral to the central bank's monetary policy," Suh Dae- il, an economist at KDB Daewoo Securities in Seoul, said in a report before the data release.
The BOK froze the benchmark interest rate at 2.75 percent in February after reducing borrowing costs in July and October last year. The new administration under President Park Geun-hye pledged in a 140-point policy agenda that it would contain the consumer price inflation at the 2 percent level for the next five years.
Decline in pork prices drove the inflation lower amid the South Korean currency's appreciation and low growth that continued to curb import price growth and demand-side inflationary pressures.
Pork prices fell 3.4 percent in February from a month before, offsetting a rise in imported beef and chicken prices. Prices of livestock products, including pork and beef, dipped 0.3 percent, decreasing the overall consumer prices by 0.01 percentage point.
Prices for agricultural products rose 1.5 percent on-month in February as cold wave and heavy snow led to a bad crop. Fresh food prices, including fruits and vegetables, advanced 1.8 percent on the back of higher vegetable prices arising from bad weather.
Oil product prices increased 1 percent last month after falling 0.5 percent in the prior month amid higher global crude prices. International oil prices averaged 112 U.S. dollars a barrel in February, up from 108 dollars in January.
Core consumer prices, which exclude volatile agricultural and petroleum products, came in at an annual rate of 1.3 percent in February. The OECD-method core CPI, excluding food and energy, rose 1.2 percent.
Prices for electricity, water and gas was unchanged in February compared with the previous month, and public services saw no change in prices last month.
Housing rents rose 0.3 percent in February on an on-month basis, but the home rental prices declined after surging to 4 percent in August last year on an on-year basis.
Private service price growth accelerated to 0.5 percent in February from a month before in the wake of rises in eating-out expenses and private tuition fees.
The finance ministry said that there remained unstable factors on the supply-side inflation such as an expansion in volatilities of global oil and grain prices, noting that it will make efforts to contain the consumer price inflation at the 2 percent level through structural reforms.
