S. Korea's annual inflation unchanged in June amid pandemic

SEJONG -- South Korea's annual inflation remained unchanged on-year in June amid the coronavirus pandemic, data showed Thursday.

The consumer price growth remained flat last month compared with a 0.3 percent on-year decline in May, according to the data released by Statistics Korea.

The nation's inflation rose 0.2 percent on-month, the data showed.

Core inflation, which excludes agricultural and petroleum products, rose 0.6 percent from a year earlier.

Utility prices fell 0.3 percent on-year last month, while prices of agricultural, livestock and fisheries products climbed 4.3 percent on-year in June, the data showed.

In June, prices of petroleum products plunged 15.4 percent on-year, the data showed. Prices of livestock products jumped 10.5 percent from a year earlier, and prices of processed foodstuffs rose 1.3 percent.

South Korea's consumer prices had increased at less than 1 percent for 12 consecutive months before growing 1.5 percent in January, followed by a 1.1 percent increase the following month  Slowing inflation may give the Bank of Korea (BOK) more room to ease its monetary policy.

In May, the BOK slashed its policy rate by a quarter percentage point to a record low of 0.5 percent as the nation's economy is expected to grow at the slowest pace in over two decades amid the pandemic.

The rate cut came a little over two months after the BOK lowered the base rate to 0.75 percent from 1.25 percent in its first emergency rate cut since October 2008.

The BOK has predicted that South Korea's economy will contract 0.2 percent and inflation will slow to 0.3 percent this year.

South Korea's exports fell 10.9 percent in June, extending a streak of double-digit contraction to a third consecutive month. However, June's exports were better than the 24 percent contraction in May, indicating that the worst may be over for exports. 

Vice Finance Minister Kim Yong-beom said exports fell at a slower pace in June as exports to China rose and global demand for technology goods rebounded. 

As the United States and the European Union gradually eased lockdown measures, the move is expected to have a positive impact on South Korea's exports in the near future, Kim said. (Yonhap)