Korea’s consumer price jumps at fastest pace in 24 years in 2022

Prices of processed foods continued to soar on a jump in energy prices [Photo by Lee Chung-woo]

South Korea’s consumer prices grew at the fastest rate in more than two decades this year, mainly driven by a surge in global commodities prices and services prices.

The Statistics Korea reported Friday that the consumer price index in 2022 hit 107.71, up 5.1 percent from the previous year. This is the fastest gain since 1998, the year at the height of the Asian financial crisis.

[Source : Statistics Korea]

Headline inflation stayed below 1 percent from 2019 to 2020 but it grew 2.5 percent in 2021, the fastest in a decade, as commodities prices began to rise on the recovery of global demand from the Covid-19 economic setbacks. The growth pace accelerated further this year, doubling that of last year.

The gain in food prices, like farm produce and fish, slowed but prices of processed foods and manufactured goods continued to soar on a jump in energy prices, said Uh Yoon-seon, a Statistics Korea official.

The CPI for living necessities jumped 6.0 percent, the highest since 1998.

The core inflation, which excludes agriculture, fishery and forestry sector and petroleum sector to show the long trend in the price level, gained 4.1 precent, the highest since 2008 when it hit 4.8 percent. The core inflation without food and energy sectors rose 3.6 percent.

Utilities prices jumped 23.2 percent [Photo by Lee Seung-hwan]

The Russia-Ukraine war has pushed up commodities prices sharply since early this year, elevating the prices of most items across the board in 2022.

Especially the price of industrial goods increased 6.9 percent. Petroleum products prices jumped 22.2 percent, the fastest since 1998. Utilities prices surged 12.6 percent, the highest 2010 when related data compiling began.

Consumer prices in December gained 5.0 percent, unchanged from the previous month. However, it marked the eighth straight month of a monthly gain of 5 percent or above.

Utilities prices jumped 23.2 percent. Prices of processed food rose 10.3 percent, the highest since April 2009, on an increase in global prices of grain and milk.

Cost of dining out increased 8.2 percent, slightly eased from 8.6 percent in November.

The core CPI, which excludes volatile food and energy prices, added 4.1 percent in December from a year ago.