South Korean inflation slowed to its lowest pace for seven months in March, state data showed on Monday, leaving more room for future monetary easing to boost the economy.
The consumer price index for March rose 1.3 percent from a year ago — slower than 1.4 percent reported in February and the slowest on-year growth since last August — according to data from the state-run Statistics Korea.
The index fell 0.2 percent from the previous month, compared to a 0.3 percent monthly increase in February.
Core inflation that excludes volatile food and fuel prices rose 1.5 percent on-year in March compared to a 1.3 percent rise in February.
Falling prices of farming products and state subsidies for expanded child care helped pull the inflation index down, the statistics agency said.
The figure was well below the central bank’s target inflation of 2.5 to 3.5 percent, opening the way for a possible interest rate cut.
The Bank of Korea has left the benchmark inter-bank lending rate unchanged at 2.75 percent since a 0.25-point cut made last October.
South Korea’s export-driven economy grew 2.0 percent for the whole of 2012 — the slowest pace in three years — compared with 3.6 percent growth in 2011, on sagging demand due to the eurozone debt crisis and a slowdown in China.
S. Korean inflation slows in March
