South Korea Inflation Rises To 2.2%

(RTTNews) - South Korea's consumer price inflation accelerated in March, but at a slower than expected pace, official data revealed Thursday.

Inflation rose to 2.2 percent in March from 2.0 percent in the previous month, the statistical office said. However, inflation was weaker than forecast of 2.4 percent.

On the other hand, core inflation that excludes food and energy prices, softened to 2.2 percent in March from 2.3 percent in the previous month.

On a monthly basis, overall consumer prices gained 0.3 percent, the same rate of growth as seen in February.

ING economist Min Joo Kang said government measures such as the fuel price cap and food vouchers helped to reduce the impact on consumers. However, the economist expects inflation to rise in the months ahead driven by energy prices.

The Bank of Korea is set to keep its policy rate at 2.5 percent at the April meeting, she said. The bank is expected to take a wait-and-see approach as it evaluates whether external shocks are contained or intensify, the economist added.