|South Korea's inflation rate has lagged far behind the Bank of Korea's 2 percent target. Yonhap|
South Korea's consumer prices may have risen nearly 2 percent last year if public prices strictly controlled by the government are not taken into account, the central bank said Tuesday.
The latest data showed the country's consumer price index increased 1.5 percent in 2018, sharply down from the previous year's 1.9 percent. It also lagged far behind the inflation target of 2 percent set by the Bank of Korea (BOK).
But according to the BOK, inflation lost some 0.5 of a percentage point due to the so-called administered prices that are controlled by the government for policy purposes.
The South Korean government manages the prices of about 40 key items, including public utilities, train travel, medical treatment and mobile phone use, as part of its plans to offer public goods at reasonable prices.
The government has kept public utility bills and public transportation rates nearly unchanged in recent years.
In the third quarter, the consumer price index rose 1.6 percent and increased 1.8 percent in the last three months of 2018.
But the BOK said the index went up 2.3 percent in the third and fourth quarters without the effect of the administered prices.
A BOK report released last year said that government-controlled prices wield a stronger influence on consumer prices amid a protracted low inflation trend. (Yonhap)