SEOUL: South Korea’s inflation accelerated to the fastest pace since 2008 in April, intensifying pressure on the central bank to execute back-to-back interest-rate increases at its policy meeting later this month.

       Consumer prices advanced 4.8% from a year earlier, quickening from 4.1% in March and exceeding economists’ estimate of 4.4%, data from the statistics office showed. Transportation costs led the gains, reflecting surging energy prices that have been exacerbated by Russia’s invasion of Ukraine.

       “The number knocked my hat off,” said An Young-jin, an economist at SK Securities. “The higher-than-consensus figure leads me to believe another rate hike in the Bank of Korea (BoK) meeting in May is inevitable. At this pace, we may even see an inflation number beginning with ‘five’.”

       Intensifying inflationary pressure is a key factor for the BoK to consider when it meets May 26 in what will be governor Rhee Chang-yong’s first rate decision.

       The Federal Reserve is widely expected to raise rates by half a percentage point later this week as it seeks to rein in consumer prices that jumped in March.

       Rhee said last week that inflation remains a bigger concern than threats to the outlook for economic growth. Inflationary pressures that drive up wages to create a vicious circle of price rises is another potential risk facing monetary policy makers.

       “Inflation is starting to weigh on the economy,” said Lim Dong-min, a Kyobo Securities researcher. “Policy makers will probably concentrate their firepower in battling inflation this quarter.”

       Inflationary pressures are likely to persist for the foreseeable future and the government is quickly implementing various measures such as fuel tax cuts to rein them in, the Finance Ministry said in a statement following the data release.

       The BoK has already hiked rates four times since August, leading the global exit from record monetary stimulus that helped soften the hit from the pandemic, while inflating asset bubbles across the economy.

       Potential hurdles in the push toward higher rates are Russia’s war on Ukraine that’s weighing on Europe’s economy and Covid lockdowns in China.

       South Korea’s exports slowed last month as shipments to China fell for the first time since October 2020. — Bloomberg