Consumer price increases by 2.4 percent for three months

The consumer price increased by 2.4 percent for three consecutive months. With agricultural and livestock products that have recorded a double-figure increase rate, the price of dining out increased to the highest level in two years and three months, increasing the burden of ordinary citizens.

According to the Statistics Korea on Friday, the consumer price index in June was 107.39, a 2.4 percent increase year-on-year. The consumer price increase rate started to become steeper since January (0.6 percent), recorded higher than two percent for the first time in April (2.3 percent) and the highest in May (2.6 percent) in more than nine years. The second quarter of the year sees the highest consumer price increase at 2.5 percent since the first quarter of 2012 (3 percent).

The price of agricultural, livestock and marine products increased by 10.4 percent due to avian influenza (AI) and other factors, leading the inflation rate. The egg price soared by 54.9 percent as it took the brunt of AI, and other products such as garlic (48.7 percent) and red pepper powder (35.0 percent) also saw a steep increase in the price.

An increase in the groceries price triggered an increase in the price of dining out by 2.3 percent, which was the highest increase rate in two years and three months since March 2019 (2.3 percent). “Personal services, agricultural, livestock and marine products, petroleum products are leading the inflation rate,” said Eo Woon-seon, director general for economic trend at the Statistics Korea. “It will be stabilized in the later half of this year.” But there are concerns that the inflation pressure is still strong as the second supplementary revised budget bill of 33 trillion won is planned to boost consumption.

The Statistics Korea announced that it will add 14 products including masks, electronic vehicles, dishwashers, clothing dryers, avocados and mangos to consumer price investigation items. It adjusts investigation items and weighted grades to be reflected to the price index once in every five years, reflecting economic and social changes. This time, the state agency added 14 items among those with a certain level (256 won) of expenditure amount of monthly average household consumption or a higher amount last year, reflecting changes of the era such as the pandemic and increased eco-friendly consumption. But 14 items including ties and briquettes whose consumption decreased and high school fees school lunches that became free by the government policy were excluded from the list. The new standard will be applied to the price index to be announced on December 22.


Min-Woo Park minwoo@donga.com