South Korea inflation rises 1.7% in May, highest in 19 months

SEOUL (AFP) - South Korea's inflation rate rose at the fastest pace for more than a year in May, on the back of higher utility costs, state data showed Tuesday.

The consumer price index rose 1.7 percent in May from a year ago - the highest increase for 19 months, according to Statistics Korea.

Month on month, the May index was up 0.2 per cent.

The May figure is still well below the central Bank of Korea's target inflation rate of 2.5 to 3.5 per cent.

The cost of gas, water, electricity and other utilities rose three per cent from a year ago, while clothing prices increased 4.2 per cent.

The core inflation rate excluding volatile oil and food prices climbed 2.2 per cent on year, slowing from a 2.3-per cent rise in April.

On month, the core inflation rate rose 0.3 per cent.

The country's central Bank of Korea has forecast an inflation rate of 2.1 per cent for 2014, following a 1.3 per cent increase in 2013 - the slowest in 14 years.

The central bank has held its key policy rate at 2.5 per cent since May last year.

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