Roundup: S. Korea's headline inflation falls below 1 pct in 3 months

South Korea's consumer prices rose 0.8 percent in January from a year earlier, boosting concerns about deflation as it fell below 1 percent first in three months, a government report showed Tuesday.

The country's headline inflation had hovered below 1 percent for 11 months through October 2015, before rising to 1.0 percent in November and 1.3 percent in December last year, according to Statistics Korea.

The consumer price inflation, however, slipped into the zero-percent range once again in January, refueling worry about deflation that means lowered headline inflation amid economic slump.

The January fall was attributable mainly to higher base effect. As the government raised cigarette prices by about 80 percent from January 2015, it had placed upward pressures on headline inflation for the entire months of last year.

The effect from cigarette price hike disappeared in January this year, dragging down the headline inflation by 0.58 percentage points and reflecting the actual conditions of consumer prices.

Oil product prices tumbled 10.3 percent in January from a year earlier due to lower crude oil prices, pulling down the consumer price inflation by 0.43 percentage points last month.

Service prices, including public utility charges, gained 2.4 percent in January, lifting the inflation by 1.3 percentage points. It marked the fastest monthly increase in about four years.

Core consumer prices, which exclude volatile agricultural and petroleum products, rose 1.7 percent in January on a yearly basis, sliding into the 1 percent level for the first time in 13 months.

The OECD-method core headline inflation, which excludes energy and food prices, gained 1.9 percent last month after staying above 2 percent for the entire months of last year.

The so-called livelihood prices, which reflect daily necessities, inched up 0.2 percent, while fresh food prices such as vegetable and fruit jumped 4.2 percent.

Higher farm goods prices and rising service prices were offset in January by cheaper oil products and higher base effect. The finance ministry expected weaker downward pressures from cheaper crude oil toward the end of 2016.

Prices for agricultural, livestock and fishery products advanced 2.4 percent in January on a yearly basis, but those for industrial goods declined 0.8 percent on lower crude prices.

Onion prices more than doubled last month, with those for garlic, beef, green onion, napa cabbage, crab and bell pepper posting a double-digit increase in January.

Prices for rice and chicken shrank 6.4 percent and 9.6 percent each, with those for green chilli pepper, strawberry, apple and egg sliding 17.2 percent, 13.7 percent, 9.6 percent and 6.7 percent respectively.

Prices for electricity, tap water and gas slumped 8.1 percent, but housing rents advanced 2.9 percent in January, marking the fastest rise in about three years.

Among public service charges, intra-city bus fare surged 9.6 percent, with sewerage service charges soaring 23.4 percent. Subway fares jumped 15.2 percent last month from a year earlier.

Rising private service charges included a 4.1 percent rise in home maintenance fees, a 10.1 percent hike in school meals and a 2.7 percent increase in tuition fees for private education institutions for junior high school students. Enditem