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SEOUL, Aug. 1 (Yonhap) -- South Korea's consumer prices grew at the fastest pace in five months in July due to the on-year gain in oil prices, but they ran below the central bank's inflation target band, a government report showed Thursday.
The country's consumer prices index rose 1.4 percent in July from a year earlier, picking up from a 1 percent on-year gain in June, according to the report by Statistics Korea.
The July data marked the fastest on-year growth since February when the index rose an identical 1.4 percent on-year. It also marked the first acceleration since January when the price growth quickened to 1.5 percent.
The statistics agency said that the growth of consumer inflation quickened last month as oil prices advanced due to a low comparison base in the same period of last year. Service charges related to summer vacations also gained ground.
From a month earlier, consumer inflation rose 0.2 percent in July after dipping 0.1 percent on-month in June.
Korea's consumer prices remained in the 1-percent range for the ninth straight month in July. The on-year growth of consumer prices in July still runs below the Bank of Korea's (BOK) inflation target band of 2.5-3.5 percent for 2013-2015.
The core inflation, which excludes volatile oil and food prices, grew 1.5 percent on-year last month, quickening from a 1.4 percent gain in June, the report showed.
The so-called "livelihood price" index that measures the costs of key daily necessities inched up 0.9 percent on-year in July, faster than the 0.3 percent on-year advance in June.
Prices of fresh food, including fruits and vegetables, gained 0.4 percent last month from a year earlier, a turnaround from the 2.2 percent on-year decline in June.
Korea's inflation remains benign amid falling oil costs, leading the BOK to make the first rate cut in seven months in May. The government and the BOK now expect the 2013 consumer inflation to grow 1.7 percent.
The BOK said in its recent semi-annual report on inflation that it sees limited demand-pull inflationary pressure due to the slowing economy, but currency fluctuation and rising prices of agricultural products and livestock may serve as upside risks to inflation.
The finance ministry said that volatile prices of agricultural products and oil price movements are likely to serve as destabilizing factors for consumer inflation in August.
The BOK froze the key interest rate at 2.5 percent for the second straight month in July. Its next rate review is slated for Aug. 8.
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