Korean consumer prices hit five-month high of 3.7% in September

[Photo by Han Joo-hyung]

South Korea’s on-year consumer prices remained above 3 percent for the second consecutive month in September as global oil prices also continued to rise.

According to Statistics Korea on Thursday, the country’s consumer price index (CPI) stood at 112.99 against the 2020 baseline of 100 in September, up 3.7 percent from the same month a year ago.

It followed a 3.4 percent rise in August and was the biggest increase since a 3.7 percent increase in April 2023.

International oil prices were the biggest driver for the increase. The decline in petroleum product prices slowed to 4.9 percent in September after falling 25.9 percent in July and 11 percent in August, which pushed the overall inflation rate upwards.

The contribution of petroleum products to inflation slowed from -1.49 percentage points in July to -0.57 percentage point in August and -0.25 percentage point in September.

“Rising international oil prices slowed the rate of decline in petroleum product prices,” Kim Bo-kyung, a senior official at Statistics Korea. “The inflation trend is likely to change alongside international oil prices moving forward.”

Prices of agricultural, livestock, and fishery products also rose by 3.7 percent, higher than the previous month’s 2.7 percent. Agricultural products gained by 7.2 percent, recording the highest growth rate in 11 months since a 7.3 percent increase in October 2022.

Fresh fruit prices gained 24.4 percent from a year ago, the largest increase since October 2020’s 25.6 percent rise, with prices of apples jumped 54.8 percent, peaches 40.4 percent, and tangerines 40.2 percent. Fresh fruits refer to fruit items with significant price fluctuations depending on season and weather conditions.

Prices of ginger also jumped 116.3 percent, carrots 37.2 percent, and rice 14.5 percent.

Core inflation, which excludes agricultural and petroleum products and shows the underlying price trends, rose 3.8 percent. The index, excluding volatile food and energy factors which is an Organization for Economic Cooperation and Development (OECD) measure of core inflation, gained 3.3 percent.

The living necessities price index, comprised of items with high purchase frequency and high expenditure share, rose 4.4 percent.

“The rise in fruit and vegetable prices was significant, with decreased production and shipments of apples and peaches due to the bad weather in the summer at the beginning of the growing season,” Kim said. “A decrease in the volume of some imported fruits also contributed to the increase in prices.”