Consumer prices rise 2.1% in 2025, with inflationary pressure possibly persisting in 2026 due to weak won

Consumer prices rose 2.1 percent in 2025, close to the government’s target of 2 percent. While overall inflation was subdued, prices for food and dining — categories with a high impact on everyday life — saw significant increases.

A driver fills their car with gas at a gas station in Seoul on Dec. 31. [NEWS1]

Consumer prices rose 2.1 percent in 2025, close to the government’s target of 2 percent. While overall inflation was subdued, prices for food and dining — categories with a high impact on everyday life — saw significant increases. In December alone, prices rose 2.3 percent, driven by the weakening won and higher petroleum prices.

The annual increase of 2.1 percent marks the lowest inflation rate in five years, according to data released by the Ministry of Data and Statistics on Wednesday. Annual consumer price inflation rose from 0.5 percent in 2020 to 2.5 percent in 2021; peaked at 5.1 percent in 2022; and fell to 3.6 percent in 2023 and to 2.3 percent in 2024.

“In 2022 and 2023, prices for petroleum products, processed foods and public services such as electricity and gas rose sharply due to global commodity price hikes,” said Lee Du-won, the director of economic statistics at the Data Ministry. “But this year, falling international oil prices reduced the pressure on petroleum and utility costs.”

By category, food and nonalcoholic beverages rose by 3.2 percent, and dining and accommodation rose by 3.1 percent. Other goods and services, including insurance fees and apartment maintenance costs, jumped by 4.5 percent.

By item, the rise in prices of agricultural, livestock and fisheries products slowed to 2.4 percent, down from 5.9 percent last year. However, agricultural prices showed less change due to the base effect of poor harvests last year, when they rose 10.4 percent. Livestock prices rose by 4.8 percent, and fisheries by 5.9 percent. Key staples saw notable increases: Pork rose by 6.3 percent, rice by 7.7 percent, mackerel by 10.3 percent and imported beef by 4.7 percent.

Factory product prices — which include processed foods and petroleum — rose by 1.9 percent, compared to 1.5 percent the previous year. Within this category, coffee prices surged by 11.4 percent, and bread by 5.8 percent. After falling by 11.1 percent in 2023 and 1.1 percent in 2024, petroleum prices rose again for the first time in three years, following a 22.2 percent spike in 2022.

A consumer buys processed food at a market in Seoul on Dec. 31. [NEWS1]

Beef imported from the United States is displayed at a market in Seoul on Dec. 26. [NEWS1]

“Although international oil prices declined, a weaker won and reduced fuel tax discounts likely pushed up gasoline and diesel prices,” Lee explained.

Consumer prices in December rose 2.3 percent on year, the fourth consecutive month with an inflation rate in the 2 percent range. The high exchange rate is believed to have driven up prices for petroleum and imported agricultural, livestock and fisheries products. Petroleum prices rose 6.1 percent, the highest since February, when they rose 6.3 percent. Agricultural, livestock and fisheries products rose by 4.1 percent overall, lifting headline inflation. Compared to the same month last year, the price of rice jumped by 18.2 percent, apples by 19.6 percent and imported beef by 8 percent.

“When the won weakens, it first affects raw material prices, which then feed into import and producer prices and eventually consumer prices,” said Lee. “Recent currency depreciation contributed to the rise in prices for petroleum and some meat and seafood items this month.”

If the won continues to weaken excessively, inflationary pressure is expected to persist into 2026.

“We expect the consumer price index to gradually fall to around 2 percent due to stable core inflation and weak international oil prices,” said Kim Woong, the deputy governor of the Bank of Korea, during a briefing on Wednesday. “Given that everyday prices remain in the upper 2 percent range, we will continue monitoring inflation closely, especially the impact of exchange rates.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY NAM SOO-HYOUN [yoon.soyeon@joongang.co.kr]