South Korea’s consumer prices up 4.2% in March, lowest in a year

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South Korea’s consumer prices eased to a one-year low in March as oil prices continued to drop, official data showed on Tuesday.

The country’s consumer price index stood at 110.56 in March, up 4.2 percent from a year earlier, slowing from 4.8 percent rise in February, according to data from Statistics Korea. It marked the lowest level since a 4.1 percent growth in March 2022.

The index has gradually slowed after soaring 4.8 percent in April last year, 5.4 percent in May, 6 percent in June and 6.3 percent in July. The hikes in public utility bills in October last year and in January this year pushed the index up 5.7 percent and 5.2 percent from a month earlier, respectively, but the index fell 1 percentage points in the last two months as oil prices continued to drop.

“It seems that the trend of rising consumer prices has slowed since the second half of last year and considering the base effect of the first half of last year when prices rose a lot, there is a high possibility that the prices will stabilize towards the second half,” said Kim Bo-kyung, a senior official at Statistics Korea. “There are many uncertain factors, however, as public utility rates, prices of international raw materials including oil, and the prices in the service sector remain under upward pressure.”

Prices of petroleum products fell 14.2 percent from a year ago in March, continuing the downward trend in February. It is the biggest drop since November 2020.

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Processed food prices rose 9.1 percent, slowing from 10.4 percent a month ago. The prices of industrial goods gained 2.9 percent on-year, compared with 5.1 percent in February.

Prices of agricultural, fisheries and livestock products, on the other hand, rose 3.0 percent on-year in March, from a 1.1 percent growth a month earlier. Agricultural product prices gained 4.7 percent, while vegetable prices rose 13.8 percent due to rising costs. Prices of livestock products fell 1.5 percent, continuing the downward trend following a drop of 2.0 percent the previous month. Seafood product prices rose 7.3 percent.

Prices of electricity, gas and water services soared 28.4 percent on-year in March, the highest since 2010 when the statistics agency started compiling related data.

Prices of personal services increased by 5.8 percent from 5.7 percent a month ago. Dining-out rose 7.4 percent, slowing from 7.5 percent the previous month, but other personal service prices climbed 4.6 percent from 4.4 percent a month ago.

Core inflation, which excludes agricultural and petroleum prices, rose 4.8 percent, the same pace seen in February. Another core inflation, which excludes volatile food and energy prices, rose 4 percent on-year last month.

Prices of daily necessities - 144 items closely related to people’s everyday lives such as food, clothing and housing - climbed 4.4 percent on-year in March, lower than 5.5 percent in February.