South Korea’s inflation accelerated the most in three months in September after typhoons damaged crops and a holiday boosted demand for food, according to a report nine days before the central bank decides interest rates.
Consumer prices increased 2% from a year earlier after a 1.2% gain in August, Statistics Korea said today. The median estimate in a survey of 12 economists was for a 1.8% gain. Prices rose 0.7% from August.
The Bank of Korea will decide on Oct. 11 whether to cut interest rates for the second time this year to counter growth risks posed by Europe’s debt crisis and a slowdown in China. South Korea’s exports fell for a third month in September and industrial production dropped more than expected in August.
An index measuring prices of fresh foods rose 8.6% in September from a year ago, while public utility costs increased 5.9%, according to today’s statement. Core consumer prices, which exclude oil and agricultural products, advanced 1.4% from a year earlier.
The won weakened 0.2% to 1,113.25 per U.S. dollar Tuesday morning.
The finance ministry announced 5.9 trillion won ($5.3 billion U.S.) of spending and tax relief last month to boost growth, adding to 8.5 trillion won of support measures in June. South Korea has been hit by storms this summer including typhoon Sanba last month, which forced tens of thousands of people to evacuate. Typhoons Bolaven and Tembin struck in August.
