South Korea inflation quickens on one-off factor, misses expectations

SEOUL, Sept 2 (Reuters) - South ‌Korea's consumer ​inflation ​quickened in August due to low-base effects from the previous comparable period a year ago, data showed on ‌Wednesday, but was lower than expectations.

The consumer price index (CPI) ⁠rose 3.1% in August from a year earlier, after climbing 2.8% in ‌July, according to the Ministry ‌of Data and Statistics. That compared with a median forecast for a 3.2% increase in a Reuters poll of economists.

Prices ​of public services rose 6.5%, driven by a one-off factor of 26.7% jump in mobile service fees due to ⁠temporary price discounts in August last year. Petroleum prices were up 14.2%, after rising ​15.5% in July.

Without the one-off effect of mobile service fees, inflation would have been weaker at 2.5%, ​the finance ministry said after the ‌data release, adding that nationwide fuel price caps lowered inflation by 0.3 percentage points last month.

The ministry ⁠also said it was expecting inflation to ease this month, while the central bank warned that the upward trend in underlying price pressure ⁠in core products would persist.

Last week, the Bank of Korea delivered a ​second straight increase in interest rates as inflation has been holding above target and financial stability risks persist.

CPI rose 0.2% on a monthly basis, ‌after falling 0.2% in the previous month. Economists had expected a 0.3% rise.

Core CPI, stripping out ‌volatile food and energy prices, was up 3.4% in August from ⁠a year earlier, after rising ‌2.6% in July. ​It was the fastest year-on-year increase since May 2023.

(Reporting by Jihoon Lee; Editing by Tom Hogue and ‌Sam Holmes)

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