Finance ministry reports July inflation slowed to 2.8 percent

The finance ministry said that consumer prices in July rose 2.8 percent from a year earlier, down from 3.2 percent in June. It said lower maximum prices for petroleum products and discount support for agricultural, livestock and fishery goods helped slow the rate.

Core inflation climbed 2.6 percent year on year, compared with 2.5 percent in June. The ministry attributed the increase to higher personal-services prices, particularly accommodation and travel during the peak season. The living-cost index, which tracks frequently purchased and high-spending items, rose 2.5 percent from a year earlier.

Prices for agricultural, livestock and fishery products rose 0.9 percent from a year earlier. Agricultural prices fell 2.2 percent, while livestock and fishery prices rose 4.4 percent and 3.9 percent, respectively. Processed-food prices rose 1.0 percent as companies raised prices. A National Data Agency official responsible for economic-trends statistics said, "Agricultural, livestock and fishery products, as well as processed foods, will need continued monitoring."

Petroleum-product prices rose 15.5 percent from a year earlier. On June 27, the government made its seventh reduction to maximum petroleum-product prices, cutting them by 150 won per liter, and early-July prices were trending lower. The maximum-price reduction lowered July's consumer-price rise by 0.3 percentage point, the ministry said.

The government will maintain oil-price controls and strengthen efforts to stabilize food costs through discounts and expanded imports and supplies. It plans to announce a Chuseok livelihood-stability package in September for holiday shopping-basket price stability.