SEOUL: South Korean consumer inflation in December came above both market expectations and the central bank's target band, data showed on Friday, even as Asia's fourth-largest economy has been losing momentum.
The consumer price index rose 4.2 percent in December from a year earlier, steady from the rate in November but topping the 4.0 percent growth seen in a Reuters poll and the 4 percent ceiling of the central bank's target band.
Consumer prices rose 0.4 percent in December from November, led by farm products and some public utility charges, the Statistics Korea data showed, also beating a 0.3 percent rise forecast in a Reuters survey.
Core inflation, which strips off volatile fuel and food prices, ticked up to 3.6 percent year-on-year in December from 3.5 percent in November, matching an over two-year high touched in July this year.
Inflation for the whole of this year averaged 4.0 percent, up from 3.0 percent in 2010 and the highest since setting 4.1 percent in 2001.
Stubbornly high inflation even as the economy is cooling poses a policy dilemma for the country's central bank, which has kept its benchmark interest rate unchanged for six months despite signs of a slowdown.
The Bank of Korea said on Thursday fighting inflation would continue to be its top policy priority in 2012 but expectations among analysts for a rate cut aimed at shoring up the economy have been rising.
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