[Breaking] August consumer prices up 1.7%…lowest in 9 months

SK Telecom's policy to lower telecom fees led to the smallest rise in consumer prices in nine months in August.

Statistics Korea said on the 2nd that the August consumer price index was 116.45, up 1.7% from a year earlier. It is the smallest increase since last November (1.5%).

The consumer price index inflation rate stayed in the 2% range from January this year, fell to 1.9% in May, but rose back to the 2% range in June–July.

The main reason for the slowdown in last month's consumer inflation was mobile phone fees, which fell 21% from a year earlier.

After a hacking incident led to large-scale subscriber losses, SK Telecom cut communication fees by 50% for all subscribers totaling over 20 million for the month of August.

Public service charges including mobile phone fees fell 3.6% from a year earlier, reducing overall prices by 0.42%percentage points (P).

Meanwhile, agricultural, livestock and fisheries products rose 4.8% from a year earlier. It was the largest increase in 13 months since July last year (5.5%), lifting overall prices by 0.37%P.

The index excluding food and energy, an OECD-style core inflation indicator, rose 1.3%, lower than the previous month's 2.0%.

The living cost index, composed mainly of frequently purchased items and close to perceived inflation, rose 1.5%, also down from 2.5% the previous month.

Oh Se-sung, Hankyung.com reporter sesung@hankyung.com