(LEAD) Consumer prices up 2.8 pct in July; oil price hike slows

South Korea's consumer prices increased by 2.8 percent in July compared to the previous year, according to data released by the Ministry of Data and Statistics. This rise in consumer prices was primarily attributed to elevated oil prices, although the rate of increase in oil prices had slowed down. Inflation had fallen below the 3 percent threshold for the first time in three months as a result of this moderation in oil price inflation.

The report indicated that oil product prices had risen by 15.5 percent year-on-year in July, down from a 24.7 percent increase in June. Oil prices were responsible for 0.6 percentage points of the overall 2.8 percent consumer price growth in July, a decrease from 0.93 percentage points in June. Diesel and gasoline prices, in particular, remained high, with prices for diesel increasing by 21.5 percent and gasoline up 12.6 percent in July.

Alongside the oil price hike, the prices of industrial products also rose by 3.7 percent in July compared to a year earlier. This growth was driven by increased costs associated with various industrial goods. On the other hand, prices for agricultural, livestock, and fishery products saw a modest increase of 0.9 percent in July, primarily due to higher beef and rice prices. Service prices, too, increased by 2.6 percent compared to July last year, primarily due to the rise in insurance costs.

Core inflation, which excludes volatile food and energy prices, also climbed by 2.6 percent compared to July last year. This represented the most significant growth since a 2.8 percent increase in December 2023.