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South Korea's inflation increases amid higher oil and food prices

South Korea's inflation increases amid higher oil and food prices
South Korea's inflation increases amid higher oil and food prices

The inflation of South Korea reportedly increased in February since holiday demand drove up the prices of food while international oil prices remained high.

According to the data from statistics office, the inflation reached nearly 1.1% from a year before, rising from 0.6% in January. Economists had expected a 1% reading.

Demand for free food tends to increase especially when the people of Korea celebrate the Lunar New Holiday and cold winter weather has strained the agricultural production. Rising prices of oil further added pressure from supply-side, even as local COVID-19 occurrences as well as social distancing limitations stopped the overall increase in price.

In a different report, the BOK (Bank of Korea) stated that the economy rose 1.2% the last quarter from the last 3 months, quicker than its early estimates. Exports, consumption as well as facilities investments rocketed more than initial estimates, whereas the intellectual property production was scaled down. The economy still declined 1% for the year as projected earlier.

The Bank of Korea last week elevated its inflation prediction for this year from about 1% to 1.3%, citing a steady economic recovery and higher prices of oil across the globe.

The economy is showing positive signs of recovery. in February, manufacturing activity also expanded at the most rapid pace in more than a decade. Meanwhile, exports, led by the country’s semiconductors increased gains for a 4th straight month.

In comparison to the last month, the consumer prices jumped 0.5% in February. The country’s year-on-year main inflation came in at about 0.8%. Meanwhile, prices of non-alcoholic beverages and foodstuffs also jumped up to 9.7% from a year before, utility costs; including energy and electricity, surged 0.1%, while education prices dropped 2.9%.

The updated GDP report of Bank of Korea presented that the economy declined 1.2% quarter from a year before, less than the earlier approximations.

Source credit: https://www.businesstimes.com.sg/government-economy/south-koreas-inflation-picks-up-amid-higher-food-oil-prices

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