Inflation Hits Decade High

Consumer prices rose 4.1 percent on-year in March, Statistics Korea said on Tuesday.

It was the first time in more than a decade that consumer prices have increased by more than 4 percent since December 2011, when they grew 4.2 percent.

The main reason is a rise in global oil and grain prices after Russia's invasion of Ukraine, and there are concerns that the trend will continue.

Prices of petroleum goods soared 31.2 percent on average from a year earlier, with kerosene up 47.1 percent, diesel 37.9 percent, gasoline 24.4 percent and LPG for cars 20.4 percent. Prices of industrial products grew 5.4 percent, the largest increase since October 2008 when they rose 9.1 percent.

The cost of eating out jumped 6.6 percent due to soaring raw material prices, which have seen their biggest increase of 7 percent since April 1998. The Bank of Korea said the inflation rate is likely to remain at 4 percent for a while.

The government said it will raise a tax cut on fuel to 30 percent from May until July to help ease inflation. The fuel tax has already been cut 20 percent since November to reduce the impact of rising global oil prices.