A customer shops at a major discount chain store in Seoul on Feb. 1, 2024. (Image courtesy of Yonhap)
SEOUL, Feb. 2 (Korea Bizwire) — South Korea’s inflation fell below 3 percent for the first time in six months in January, showing signs that inflationary pressure is easing, data showed Friday.
But the prices could bounce back again to over 3 percent in the coming months due to rising global oil prices, Finance Minister Choi Sang-mok said, vowing stronger policy measures to bring inflation under control.
Consumer prices, a key gauge of inflation, rose 2.8 percent on-year last month, compared with a 3.2 percent increase a month earlier, according to the data from Statistics Korea.
It is the first time that the figure fell below the 3 percent level since July last year when the prices gained 2.4 percent.
Inflation then rose to 3.4 percent in August and further to 3.7 and 3.8 percent the following months before coming to 3.3 percent in November on high prices of energy and farm produce.
The price growth slowed down for the third month in a row in January.
Core inflation, which excludes volatile food and energy prices, went up 2.6 percent on-year in January, logging the slowest growth since November 2021, when the figure came to 2.4 percent.
Prices of daily necessities — 144 items closely related to people’s everyday lives, such as food, clothing and housing — climbed 3.4 percent on-year this year.
Prices of agricultural, livestock and fishery products surged 8 percent on-year last month.
A sign at a gas station in Seoul shows gasoline and diesel prices on Jan. 28, 2024, as fuel prices are predicted to rise. (Image courtesy of Yonhap)
Agricultural products, in particular, logged a 15.4 percent price growth, following a 15.7 percent increase in December. Of major items, prices of apples and tangerines spiked 56.8 percent and 39.8 percent, respectively, in January.
Prices of industrial products added 1.8 percent, as rising prices of ice cream, bread and clothing offset the falling prices of petroleum products. Diesel prices shed 11.9 percent on-year, and liquefied petroleum gas for vehicles fell 4.7 percent.
Service prices increased 2.6 percent on-year in January, the data showed.
“Petroleum products reported a 5 percent price fall on-year, which was attributable to a 0.21 percentage fall in the overall inflation last month,” an agency official said.
“But fruit prices, in particular, remain high due to unfavorable weather conditions and high demand. Such issues are likely to continue for some time,” she added.
During an emergency economic ministers meeting Friday, Finance Minister Choi Sang-mok pointed to the possibility of inflation accelerating again given recent global oil prices.
“Inflation could rise to around 3 percent in February and March as the Middle East instability pushed oil prices to over the US$80 level. The government will make every effort to ensure 2 percent price growth at an early date,” Choi said.
Dubai crude, South Korea’s benchmark, rose to $82.4 per barrel in January from the previous month’s $77.3, according to government data.
Last year, consumer prices advanced 3.6 percent on-year, slowing from a 5.1 percent gain in 2022. Excluding the 2022 figure, last year reported the steepest price growth since 2011.
The government has said that inflationary pressure is forecast to ease at a slower pace than earlier expected before reaching its target rate of 2 percent by around the end of 2024.
The finance ministry expected this year’s prices to grow 2.6 percent.
(Yonhap)
