Consumer prices rose 3.4% in August… Back to 3% after 3 months

National Statistical Office announces ‘August consumer price trend’,
showing the 2% level for two consecutive months, then
rebounding with a sharp reduction in the decline in petroleum products to the 3% range
‘Standard trend’ Core price changes are minimal

The consumer price inflation rate, which fell to the 2% range in June and July, has fallen for three months. After a while, it rose again to the 3% range. It has been 7 months since the price increase increased again compared to the previous month. This is due to the rise in international oil prices last month and the rise in prices of agricultural products due to climate effects such as heavy rain and heat waves.

According to the ‘Consumer Price Trends for August 2023’ announced by Statistics Korea on the 5th, Korea’s consumer price index last month was 112.33 (2020 = 100), up 3.4% from the same period last year. This is a 1.1 percentage point (p) increase from the consumer price inflation rate (2.3%), which was the lowest in about two years the previous month.

Korea’s consumer price index peaked at 6.3% in July last year and then went downhill. This year, starting with 5.2% in January, it steadily declined to 4.8% in February, 4.2% in March, 3.7% in April, and 3.3% in May, and hit 2.7% in June, falling below 2% for the first time since September 2021. There has been an increase in the rate. It was in the 2% range for two consecutive months and then rose again to the 3% range.

However, there was little change in basic price trends compared to the previous month due to the large impact of volatile oil and agricultural products. Last month, the core price index (excluding agricultural products and petroleum products), which shows the basic trend of prices, rose 3.9%. Compared to the previous month, it is an increase of 0.2%. The index excluding food and energy, which is the core price based on the Organization for Economic Cooperation and Development (OECD) method, also rose by 3.3% compared to the same month last year and by 0.3% compared to the previous month.

The cost of living index, which represents the perceived cost of living and consists mainly of items that are sensitive to price changes due to their high frequency of purchase and high expenditure, rose by 3.9%. The increase was the largest since last March (4.4%). This is due to the large increase in food prices (4.7%) compared to the previous year. The fresh food index, which reflects the prices of items whose prices fluctuate greatly depending on weather conditions or seasons, such as fish, seafood, vegetables, and fruits, rose 5.6% compared to the same month last year. This is the highest level since last March (7.3%).

Looking at each item, most items showed an upward trend. Agricultural, livestock and marine products rose 2.7% compared to the same month last year. Apples (30.5%), rice (7.8%), watermelon (18.6%), peaches (23.8%), sweet potatoes (22%), mackerel (9.7%), and red pepper powder (9.3%) rose, while domestic beef (- 6%), cabbage (-16.7%), imported beef (-7.3%),안전놀이터 garlic (-13%), pumpkin (-18.3%), radish (-12.6%), eggs (-3.4%), etc.

Industrial products showed a 2.6% increase. Among these, petroleum products fell by 11% compared to the same month last year, which is a sharp decrease from a month ago (-25.9%). The explanation is that the slowdown in the decline in petroleum products due to the rise in international oil prices influenced the rebound in the inflation rate this month. Kim Bo-kyung, Economic Statistics Director at the National Statistical Office, explained, “The price increase ranged from 2.3% to 3.4%, and petroleum contributed about 80%.” Electricity, gas, and water rose 21.1% compared to the same month last year

. Electricity costs rose 25%, city gas rose 21.4%, and district heating costs rose 33.4%. There was little change compared to a month ago, with city gas rising only by 0.2%.

Service prices rose 3% compared to the same period last year. Among these, personal service prices rose 4.3%, which was the smallest increase in 18 months since February of last year (4.3%). Among personal services, prices for eating out rose 5.3%, and prices excluding eating out rose 3.6%. Prices excluding eating out and dining out recorded the lowest increases in 20 and 15 months, respectively. Public service prices rose 1.7%. Taxi fares increased by 19.1% and city bus fares increased by 8.1%.

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