South Korea consumer inflation hits 21-month low

SEOUL (Reuters) -South Korea’s consumer inflation slowed more than expected and hit a 21-month low, official data showed on Tuesday, weighed by falling oil and agricultural product prices.

The consumer price index rose 2.7% in June from a year earlier, compared with an increase of 3.3% in May and a median forecast of 2.85% in a Reuters survey of economists.

It softened for a fifth consecutive month and marked the weakest annual increase since September 2021, according to Statistics Korea.

Core inflation, which excludes volatile food and energy prices, slowed to 3.5% from 3.9% a month before, marking the slowest annual rise since May, 2022.

The headline index was flat on a monthly basis, compared with a 0.3% rise in the previous month and a 0.2% increase expected by economists.

Prices of petroleum products dropped 4.0% over a month and agricultural products fell 0.9%, but public utility prices rose 2.2%.

Services prices rose 3.3% from a year earlier, weaker than 3.7% in May and the slowest in 14 months.

South Korea’s central bank has kept monetary policy unchanged since its last interest rate hike in January and its tightening campaign is widely expected to be over. The bank next meets on July 13.

(Reporting by Jihoon LeeEditing by Ed Davies and Sam Holmes)