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South Korea Inflation Falls To 14-Year Low

koreatrade 120110

Consumer prices in South Korea gained just 0.8 percent on year in September, Statistics Korea said on Tuesday - slowing to a 14-year low.

The headline figure was well below forecasts for an increase of 1.2 percent and down sharply from 1.3 percent in August.

The CPI now moves even further below the Bank of Korea's target range of 1.5 to 3.5 percent, which it had lowered this year from 2 to 4 percent in 2012.

On month, CPI added 0.2 percent - below forecasts for 0.3 percent, which would have been unchanged.

Core CPI was up 0.4 percent on month in September following a flat reading in August. On year, it jumped 1.6 percent - accelerating from 1.3 percent in the previous month.

By individual component, The index for clothing and footwear was up 0.7 percent, while furnishings, household equipment & routine maintenance prices added 0.5 percent and health and miscellaneous goods gained 0.2 percent and services spiked 4.5 percent.

The index for food and non-alcoholic beverages shed 0.2 percent, while transport was down 0.5 percent, communication eased 0.1 percent and recreation and culture dipped 0.9 percent.

The index for restaurants and hotels was unchanged in September.

Also on Tuesday:

• South Korea posted a merchandise trade surplus of $3.71 billion in September, the Ministry of Trade, Industry and Energy said.

That's down from the $4.85 billion surplus in August - but up from the $3.07 billion surplus in September 2012.

Exports were down 1.5 percent on year to $44.74 billion, the ministry said - while imports fell an annual 3.6 percent to $41.03 billion.

• The HSBC manufacturing PMI for South Korea came in with a score of 49.7 for September. That's up from 47.5 in August, although it remains just below the boom-or-bust line of 50 that separates expansion from contraction.

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