By Cynthia Kim
SEOUL (Reuters) -South Korea’s consumer inflation for January hovered near a decade-high on surging fuel and food prices, boosting the case for more interest rate hikes in 2022.
January consumer prices jumped 3.6% from a year earlier, beating a 3.3% gain tipped in a Reuters poll and remaining above the central bank’s 2% target for a 10th straight month.
Core inflation, which excludes volatile food and fuel costs, jumped 2.6% from a year earlier, the fastest since December 2015, in a sign that surging prices of fuel and other raw materials have fed through to higher service costs for goods and services.
A sub-index on fresh food prices jumped 6.0% year-on-year and one for agricultural and fisheries soared 6.3%, government data showed on Friday.
Transportation costs gained 7.2% year-on-year, boosted by rising prices of automotive fuel imports.
The strong reading, coming after a 3.8% rise in November, is fanning views the Bank of Korea could raise interest rates again this year after its back-to-back hikes brought the benchmark interest rate to pre-pandemic levels of 1.25% in January.
The minutes from the board’s Jan. 14 meeting showed a majority of its seven members were worried about price pressures building, which could hurt sentiment as Asia’s fourth largest economy recovers from the COVID-19 epidemic.
(Reporting by Cynthia Kim, Jihoon LeeEditing by Chris Reese)
