Consumer prices grew 0.5 % in 2020

A man riding a bicycle for food delivery passes through restaurants near Gangnam Station, Seoul, Dec. 24. (Yonhap)

South Korea‘s consumer price inflation hovered below 1 percent this year for the second consecutive year, data showed Thursday.

According to data by Statistics Korea, the consumer price index stood at 105.42 in 2020, up 0.5 percent from a year earlier. In 2019, the index rose 0.4 percent.

Core inflation, which excludes volatile food and oil prices, grew 0.4 percent in 2020, the lowest since a 0.2 percent fall in 1999.

It marks the first time annual inflation has stayed below 1 percent for two years in a row since 1965, when the statistics agency started compiling the data.

The on-year growth rate of the consumer prices had previously dipped below 1 percent only three times: in 1999 when the Asian financial crisis hit the country, as well as 2015 and 2019.

The country saw inflation slow as a decline in low oil prices and falling demand due to social distancing measures to contain COVID-19 outbreak pushed down prices.

“Low oil prices drove down prices of petroleum products and stricter social distancing limited a rise in service prices such as restaurant and leisure services,” Ahn Hyung-jun, a senior Statistics Korea official, said at a press briefing.

“A drop in public service prices due to government policies such as supporting high school fees also affected (the annual inflation rate).”

Prices of petroleum products declined 7.3 percent this year, while prices for paying personal services, including dining out and recreation, rose 1.2 percent, the lowest growth in eight years. Prices for using public services fell 1.9 percent.

By Park Han-na (hnpark@heraldcorp.com)

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