S. Korea inflation slows to 1.6 percent

A South Korean woman walks past a commercial sign at a shopping district in Seoul on December 30, 2011. AFP FILE PHOTO

SEOUL – South Korea’s inflation rate slowed to a three-month low in November, government data showed Monday, allowing more room for the central bank to cut rates to bolster growth.

The consumer price index rose 1.6 percent from a year earlier, slowed by falling prices of telecommunication services and key items including medicines and televisions, according to Statistics Korea.

The November figure compared with a 2.1 percent gain the month before and is the lowest since a 1.2 percent increase in August.

It was well below the Bank of Korea’s inflation target of 2.0 to 4.0 percent.

Core inflation, which excludes volatile energy and food prices, was 1.3 percent in November, down from 1.5 percent in October.

Central bank policymakers are widely expected to leave the key interest rate unchanged at 2.75 percent in a meeting next week, after already trimming it twice so far this year.

Asia’s fourth-largest economy expanded at the slowest pace in three years in the third quarter, prompting expectations of a further rate cut early next year.