Korea’s inflation gains below 4% for first time in 14 months in April

[Photo by Yonhap]

South Korea’s inflation eased to below 4 percent for the first time in 14 months in April as prices of agricultural, livestock, and fisheries products fell from a month ago, although the cost of dining out rose nearly 8 percent to weigh on household spending.

According to data from Statistics Korea on Monday, the country’s consumer price index (CPI) jumped 3.7 percent in April to stay below the 4 percent level for the first time in 14 months.

However, the cost of dining out gained 7.6 percent year over year in April, up 0.2 percentage point from a month ago. The cost had declined for six straight months from October last year to March this year before rising in April.

Prices of processed foods soared 7.9 percent, slowing 1.2 percentage points from a month ago, in April, but the gain is still 2.1 times higher than the average inflation.

The inflation rate for eating out and for processed foods have been above the average for 23 and 17 consecutive months, respectively.

The cost of dining out in April, in particular, was 3.9 percentage points higher than the average inflation, the widest gap in nearly 31 years since 5 percentage points in May 1992.

The inflation rate for processed foods was 4.2 percentage points higher than the average last month. In February, the gap was 5.6 percentage points, the widest in more than 13 years since July 2009 when the gap was 6.1 percentage points.

The figures suggest that food costs, including eating out and processed foods, remain a large part of inflation.

Of the 112 items among the dining out and processed foods categories, 32, or 28.6 percent, saw prices gain by more than 10 percent last month.

Prices of jams and dressings soared more than 30 percent, cheese 24.9 percent, corn syrup 23.7 percent, and processed crab meat 23.2 percent.

Prices of flour jumped 19.2 percent in April from a month ago, hamburger 17.1 percent, cooking oil 15.4 percent, noodles 13.7 percent, and instant noodles 12.3 percent.

Prices of agricultural and livestock products, in the meantime, stabilized in April, with inflation at 1 percent. Prices of mackerel and chicken, however, surged 13.5 percent and 12.3 percent, respectively.

Prices of soju and beer increased 0.4 percent and 0.7 percent, respectively, in April from a month ago, sharply down from the gains of 8.9 percent and 7 percent in January after the government’s request to refrain from price hikes.