[THE INVESTOR] Rent has become the biggest contributing factor to inflation since 2013, a Bank of Korea report showed on July 29.

According to the report, rent has come to account for 0.36 percentage points of the 1.1 percent consumer price rise recorded between the beginning of 2013 and June this year. 


In comparison, rent accounted for 0.29 percent of the inflation rate of 3.1 percent recorded for 2006 to 2012 period.

The changes are thought to have been fueled by the spike in residential property prices caused in part by the low interest rates.

In comparison, education costs’ share in inflation went from 0.4 percentage points to 0.15 percentage points, while the figures for transportation costs went from 0.13 percentage points to 0.09 percentage points.

Regarding the drop in overall consumer inflation, the BOK said that changes in international oil prices were the biggest factor.

Between 2006 and 2012, international oil prices contributed 0.52 percentage points to the consumer price rise. In contrast, international oil prices have resulted in bringing the rate down by 0.51 percentage points since 2013, the BOK said.

By Choi He-suk (cheesuk@heraldcorp.com)