South Korea’s consumer prices rise at fastest pace since 2008

Asia’s fourth-largest economy saw its consumer price index rise 4.8 percent last month from a year earlier.

South Korea’s consumer prices rose at their fastest pace in nearly 14 years in April on the back of surging food and energy prices, in the latest sign of high inflation taking off in Asia.

Asia’s fourth-largest economy saw its consumer price index (CPI) rise 4.8 percent last month from a year earlier, up from a 4.1 percent increase in March, Statistics Korea data showed on Tuesday.

The rise, which exceeded market expectations, marks the quickest price growth since October 2008, during the global financial crisis.

The index rose 0.7 percent on a monthly basis, after rising 0.7 percent in March. Core inflation, which excludes volatile energy and food prices, rose to 3.1 percent on a year-on-year basis in April, up from 2.9 percent in March and the highest since May 2009.

The surge in prices is likely to increase pressure on the Bank of Korea, whose new governor Changyong Rhee has expressed concerns about mounting inflation risks, to increase interest rates at its next policy meeting on May 26.

After avoiding the soaring inflation seen in the United States and Europe, Asian economies have become increasingly concerned about rising prices amid inflationary pressures including the war in Ukraine and pandemic-related supply chain disruptions.

The Bank of Korea, which is seen as one of the region’s more hawkish central banks, last month announced a surprise 0.25 percent interest rate increase, taking the benchmark rate to 1.50 percent.

The move marked the fourth increase of the central bank’s base rate since it began tightening policy in August last year as one of the first central banks in high-income countries to raise the alarm about inflation.

Singapore and New Zealand also raised interest rates last month amid growing inflation concerns, while Australia is tipped to announce the first of a series of rate hikes on Tuesday.