May inflation rate probably remained high due to base effect: senior official

The growth rate of South Korea's consumer prices for May is estimated to have remained high due largely to last year's low base, a senior government official said Tuesday, amid concerns about growing inflationary pressure.

First Vice Finance Minister Lee Eog-weon said the growth of consumer inflation is likely to surpass 2 percent in the second quarter, but annual inflation is not likely to top the central bank's target of 2 percent.

He said the government will unveil a set of measures to help stabilize consumer prices this week.

The country's consumer prices rose 2.3 percent on-year in April, the fastest gain in almost four years, as prices of farm and oil products jumped.

In May last year, consumer prices declined 0.3 percent on-year, the first fall in eight months, due to the fallout of the COVID-19 pandemic. The statistics agency plans to release inflation data on Wednesday.

The country's inflationary pressure remained muted last year due to the pandemic. But consumer inflation is increasingly under upward pressure as the Korean economy is on a recovery track, led by robust exports.

Despite growing price pressure, policymakers said the growth of inflation is expected to moderately slow in the second half as a lower base effect will likely ease and the supply of agricultural goods is likely to improve.

Last week, the Bank of Korea revised up its 2021 inflation outlook to 1.8 percent from its earlier estimate of 1.3 percent. The central bank aims to keep annual inflation at 2 percent over the medium term. (Yonhap)