South Korea cuts inflation rate with new consumer price index


AFP

SEOUL — South Korea said Tuesday it is revising the makeup of its consumer price index, a move which will cut this year’s official inflation rate amid public pressure to curb prices. Statistics Korea said the index rebasing, which takes place every five years, would lead to a downward revision in inflation for January-October to 4 percent from 4.4 percent. The revised figure is in line with the government’s targeted upper limit for inflation this year.

The statistics office said in a statement that smart phone rates, prices of game consoles and makgeolli (Korean rice wine), along with 40 other items, were added to the basket that makes up the price index. But camcorders, gold rings, public phone rates and 18 other goods and service items were dropped. Statistics Korea said gold rings were excluded because they should be considered an asset and not a consumer product. Gold prices have soared this year and removing rings from the list will lower inflation by 25 basis points. Under the old price index, annual inflation was 3.9 percent last month compared to 4.3 percent in September. The figure for November, to be released Thursday, will be based on the new index.