S.Korea inflation accelerates 5.4% in May to near 14-year high

APD NEWS

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South Korea's consumer inflation picked up more than expected in May to a near 14-year high on a global surge in materials and food costs, data showed on Friday.

The consumer price index rose 5.4 percent in May from a year before, the Statistics Korea data showed.

It was the fastest annual growth since August 2008, standing above the central bank's 2 percent target for a 14th consecutive month and cementing the case for further interest rate increases.

"We don't expect interest rates to be raised faster because of today's figures, but the central bank will need to keep the tightening stance while watching for any sign of inflation peaking out around July," said Kong Dong-rak, an economist at Daishin Securities, who expects the central bank to raise rates two more times this year.

The Bank of Korea has raised policy rates by a total of 1.25 percentage points in five steps since August last year, including a 25 basis-point hike last week, and has warned of more increases to fight the inflation.

(CGTN)