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S.Korea's low inflation prolonged on low food, energy prices

Xinhua, July 29, 2016 Adjust font size:

South Korea's low headline inflation is prolonged on the back of low food and energy prices, central bank report showed on Friday.

The Bank of Korea (BOK) 's report said the country's consumer price inflation averaged 1.1 percent from 2013 through June this year, down from an average 3.1 percent tallied between 2006 and 2012.

The headline inflation has stayed below the BOK's inflation target of 2 percent for long as low food and energy prices pulled down consumer prices.

Contribution of food prices to inflation declined from 0.68 percentage points between 2006 and 2012 to 0.15 percentage points from 2013 through June this year.

The figure for energy prices shed from 0.52 percentage points to minus 0.51 percentage points in the cited period.

Lower global oil prices made the biggest contribution to the prolonged trend of low inflation in terms of supply side. Global crude oil prices dragged down consumer prices by 0.9 percentage points since 2013.

The BOK said in the report that downward pressures are not at a dangerous level as the secondary effect of low oil prices hasn't appeared yet, expecting the consumer price inflation to meet the BOK's inflation target of 2 percent in the first half of next year. Enditem