SEOUL, May 2 (Xinhua) -- South Korea's consumer price inflation stayed below 2 percent for the seventh consecutive month amid stable prices for services and oil products that offset a fast increase in farm goods prices, a government report showed Wednesday.
Consumer prices gained 1.6 percent in April from a year earlier, hovering below 2 percent since October, according to Statistics Korea.
It marked the highest in six months as farm goods prices rose rapidly, increasing living costs for households.
Agricultural product prices picked up 8.9 percent in April, pulling up the overall inflation by 0.39 percentage points. It was the highest since August last year.
Vegetable prices advanced 8.5 percent last month, the highest since last August. Potato prices surged 76.9 percent on bad weather, posting the fastest gain in about 14 years.
Prices for rice, powdered red pepper, white radish and pumpkin logged a double-digit increase, increasing livelihood costs for households.
The fresh food price index, which reflects prices for fish, shellfish, vegetable and fruit, added 4.7 percent. The index has a high volatility in accordance with weather conditions and seasonal factors.
Services prices rose 1.6 percent in April from a year earlier, showing a stable picture. Eating-out costs went up 2.7 percent, with costs at lunchroom of companies adding 3.7 percent.
Excluding the dining-out costs, the services prices increased 2.4 percent last month.
Management costs for apartment buildings picked up 6.8 percent in April, while salary for household maid jumped 10.8 percent as the government raised minimum wage by 16.4 percent from this year.
Oil product prices, however, declined 3.8 percent, helping stabilize the consumer price inflation. Prices for livestock and fishery products shrank 4.7 percent and 5 percent, respectively.
The so-called livelihood price index, which reflects costs for daily necessities, gained 1.4 percent in April.
Core consumer prices, which exclude volatile agricultural and oil products, added 1.4 percent, indicating a demand-side inflationary pressure at a low level.
The low inflationary pressure from the demand side reduced pressure on the Bank of Korea (BOK) to raise its policy rate.
The BOK's target rate of 1.5 percent was lower than the U.S. Federal Reserve's benchmark rate of a range of 1.50-1.75 percent.
If the BOK belatedly tighten its monetary policy, foreign capital may abruptly flow out of the South Korean financial market.
The South Korean central bank lifted its policy rate by a quarter percentage point to 1.5 percent in November last year, the first rate increase in almost six and a half years.
The protracted low-rate stance encouraged households to purchase new home with borrowed money, leading to a record-breaking household debt.
