S. Korean consumer prices jumped 3.2% in October, sharpest leap in nearly 10 years

Korea's consumer price index, which measures the "sticker shock" that shoppers encounter, rose by 4.6% — the most the index has risen since August 2011

A discount gas station in Seoul displays fuel prices on Tuesday. (Yonhap News)

The rising price of crude oil and the base effect of government support for cell phone bills last year combined to drive consumer prices up 3.2% last month. That is the highest rate of inflation Korea has seen in nine years and nine months.

Data released by Statistics Korea on Tuesday about consumer price trends in October show that the consumer price index stood at 108.97 (relative to 100 in 2015), a 3.2% year-over-year increase. That’s the most prices have risen since January 2012 (3.3%).

The rate of increase for consumer prices climbed above the 2% line in April (2.3%), hovered in the mid 2% range between May and September (2.4-2.6%), and finally jumped above 3% last month.

The biggest impact came from manufactured goods, which accounted for 1.4 points of the increase. The price of manufactured goods rose 4.3% year on year, representing the largest increase since February 2012 (4.7%).

The price of petroleum products surged 27.3%, the most since August 2008 (27.8%). That led to big jumps in the price of gasoline (26.5%), diesel (30.7%), and liquefied petroleum gas (LPG) for vehicles (27.2%).

There was also a major increase in the price of services, including telecom prices and key money — a common type of rental arrangement in Korea under which the tenant puts down a large deposit in lieu of monthly rent. Mobile phone usage fees jumped 25.5% because of the base effect of telecom subsidies the government provided in October last year, while the price of public services rose 5.4%.

Overall, residential rents increased 1.8%. Monthly rent edged up 0.9% while key money prices shot up 2.5%, the biggest increase since November 2017 (2.6%).

In the area of agriculture, livestock and seafood, the price of produce declined 6.3%, led by Napa cabbages (-44.6%), apples (-15.5%) and green onions (-36.6%). But livestock prices climbed 13.3%, driven by eggs (33.4%), pork (12.2%), domestic beef (9.0%) and imported beef (17.7%).

The consumer price index, which measures the “sticker shock” that shoppers encounter, rose by 4.6%. That’s the most the index has risen since August 2011 (5.2%).

Core inflation also rose by 2.8%, in its biggest move since January 2012 (3.1%). That figure excludes volatile food and energy prices to show the underlying trend in the price of goods.

By Lee Jeong-hun, staff reporter

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