Prices of free food products grew by 8.5% compared with 2.4% for food products with administered prices
. Consumer prices up 0.6% in one month The consumer price index rose 0.6% in August 2019, compared with 0.3% in July 2019.
'Subdued domestic demand pressures and the modest increase in foreign prices contributes to the positive inflation outlook in the medium term and this outlook is subject to upside risks emanating from the potential rise in administered prices
and government levies and taxes beyond current forecasts,' he said.
On the other hand, prices of free products (non-administered) increased by 7.3% against 4% for administered prices
In addition, the prices of energy-related goods and other goods with administered prices
have been hiked a few times, coupled with sector-specific supply-side shocks.
The growth in administered prices
decelerated, to 17.6% yoy.
The sector has the direct linkage to the dismantling of administered prices
in petrol and diesel, which have witnessed increases in the recent past as part of lessening the subsidies.
The Bank of Korea (BOK) released a report on the effects of administered prices
on the macro economy.
These include issues with the quantity of production used in market price support calculations, the exclusion of state-level bonuses from calculations of applied administered prices
, exclusion from India's notifications of information on the total value of production of wheat and rice and issues with currency conversions.
On the back of the increases in administered prices
, inflation for the electricity, gas and other fuels sub-component jumped by 24 per cent year on year in January, while transportation rose by 10.5 per cent.
"The drop in inflation over the past six months has reflected the unwinding impact of the pound's steep devaluation, hikes in administered prices
and the introduction of a value-added tax, all of which came in November 2016," the report affirmed.
The year-end inflation is projected to remain low at 3.7% in 2017 and 3.6% in 2018, due to the stable food and administered prices
. The current account deficit is estimated at 1.7% of GDP 2017 and 1.9% of GDP 2018.
He added: "An administrative case was opened against the hotel on the count of illegally overstating administered prices