August Inflation Remains Benign (Business Brief No.3452 Full Ed.)

August Inflation slid for the eighth consecutive month to 1.59 percent YoY, its slowest pace in 46 months and also being substantially lower than what had been forecast by most analysts. When compared with July, August inflation declined 0.01 percent in line with declines in retail oil prices (down 1.01 percent MoM on falling global crude oil prices), plus fruit and vegetable prices (down 1.78 percent MoM due to the beginning of harvests) that helped offset increases in the prices of meat products, e.g., chicken, duck and fish (up 1.32 percent MoM), prepared foods (up 0.19 percent MoM), eggs and dairy products (up 0.96 percent MoM) that were driven by rising raw material costs.

In September, KResearch expects that the Consumer Price Index (CPI) will edge up slightly by 0.15 percent MoM, due to a combination of factors. They include rising retail oil prices consistent with global oil prices amid prolonged violence in Syria, plus recent hikes in expressway toll charge, as well as the utility electric power “Ft” charge and cooking gas price. However, due to a low 2012 base, Headline Inflation in September may remain within 1.4-1.7 percent, which would then be slightly lower than 1.59 percent YoY reported in August.