SEOUL, Aug. 2 (Xinhua) -- South Korea's headline inflation hit the highest in almost 24 years in July owing to soaring energy prices and higher eating-out costs, statistical office data showed Tuesday.
The consumer price index (CPI) stood at 108.74 in July, up 6.3 percent from the same month of last year, according to Statistics Korea. It was the fastest increase since November 1998.
The headline inflation has been on the rise this year, with 4.1 percent in March, 4.8 percent in April, 5.4 percent in May and 6.0 percent in June, respectively.
The runaway inflation was driven by surging global commodity prices amid the continued supply chain disruptions and the prolonged geopolitical risks in Europe.
Pent-up demand, caused by the lifting of all anti-COVID-19 measures except an indoor mask mandate, boosted services prices, especially eating-out costs, as well as farm goods prices.
The inflation exceeded the Bank of Korea (BOK)'s mid-term target of 2 percent for 16 months in a row.
To counter the soaring inflation, the BOK has hiked its policy rate six times since August last year, including the first 50-basis-point rate increase in July.
The BOK said in a report to parliament Monday that it needed to keep its rate hike stance in place as this year's consumer price inflation was forecast to considerably top the central bank's inflation outlook of 4.5 percent.
Inflation expectations, which measure outlook among consumers over headline inflation for the next 12 months, hit a record high of 4.7 percent in July after posting 3.1 percent in April, 3.3 percent in May and 3.9 percent in June.
Price for industrial products, including oil products, jumped 8.9 percent in July from a year earlier, lifting the overall inflation by 3.11 percentage points.
Oil products price spiked 35.1 percent, with those for gasoline and diesel surging 25.5 percent and 47.0 percent.
Processed food price gained 8.2 percent last month on expensive bread, after advancing 7.9 percent in the previous month.
Private services price, including eating-out costs, increased 6.0 percent in July from a year earlier, raising the overall headline inflation by 1.85 percentage points. It was the highest gain since April 1998.
Expense for dining out jumped 8.4 percent last month, and public services price added 0.8 percent.
Price for agricultural, livestock and fishery products was up 7.1 percent in July on a yearly basis, marking the highest since December last year.
Vegetable price picked up 25.9 percent, and those for pork and imported beef soared 9.9 percent and 24.7 percent respectively.
Price for electricity, natural gas and tap water advanced 15.7 percent in July, logging the highest since relevant data began to be compiled in January 2010.
Housing rent, including Jeonse and monthly rent, climbed 1.9 percent in July from a year earlier.
Jeonse is South Korea's unique contract between two households where a landlord grants a two-year residential right to a tenant, who in turn lends a certain amount of money, or deposit, to the landlord.
The livelihood items index, which gauges the price for daily necessities, gained 7.9 percent in July from a year earlier, posting the highest growth since November 1998.
The fresh food index, which measures the price for fish, shellfish, fruit and vegetable, increased 13.0 percent in the cited month.
Demand-side inflationary pressures mounted on pent-up demand, caused by the lifting of anti-virus measures.
Core consumer price, which excludes volatile agricultural and oil products, went up 4.5 percent in July, posting the highest since March 2009.
The OECD-method core price, which excludes volatile energy and food costs, climbed 3.9 percent in July. ■