Consumer Prices Jump 2% in May

Consumer prices grew 2 percent from a year earlier in May, compared with a 1.9 percent gain the previous month, data showed Thursday.

Surging prices of livestock products such as pork and chicken led the growth, according to Statistics Korea.

Steadily-rising prices of daily necessities are undermining households further, which are already suffering from debt and stalled income growth.

"Avian influenza, which hit the country late last year, has spurred the price of eggs. Rising demand amid falling supply has increased the prices of pork and chicken, and those of fishery products," said Woo Young-jae from Statistics Korea's economic statistics bureau.

The 2 percent growth is in the range of the central bank's target.

Still, rising consumer prices will limit households' purchasing power, keeping consumer spending from posting any marked recovery, analysts say.

"Consumption remains weak on the burden of household debt and an aging population," said Kim Doo-un, an economist at Hana Financial Investment.

The debt has climbed by double digits for five straight fiscal quarters, Kim said. It reached nearly 1,360 trillion won ($1,100 billion) in the first quarter of this year, up 11.1 percent from a year ago. The debt in proportion to disposable income stood above the OECD average at 155 percent.

With the central banks in the United States, Europe and Japan moving to normalize their monetary policies, the household debt burden is expected to increase. The U.S. Fed is expected to raise its interest rate this month.

The slow income growth on a diminishing trickle-down effect and low employment is also weighing on consumption, despite...