Korea’s CPI continues upward trend in October despite geopolitics, weather

[Photo by Yonhap]

South Korea’s latest consumer price growth continued upwards for a third consecutive month in October due to increased global oil volatility following the ongoing Israel-Hamas conflict and expected fluctuations in agricultural product prices due to extreme weather.

Statistics Korea data on Thursday found that the country’s consumer price index (CPI) for October was 113.37, up 3.8 percent from the same month in 2022.

The inflation index continued its rise of around 3 percent for three months since August.

Oil prices fell by 1.3 percent from a year ago but rose 1.4 percent on month due as global oil prices became more volatile due to the conflict in Middle East.

“Uncertainty is so high that the geopolitical factors are expected to heavily affect international oil prices and exchange rates in November,” according to Kim Bo-kyung, a senior official at Statistics Korea.

The price of agricultural, livestock, and fishery products also rose 7.3 percent from the previous year. Agricultural products rose 13.5 percent on year, the biggest jump in 29 months since May 2021.

Agricultural prices tend to level off as supply increases during autumn, when products are harvested. But supply fell this year due to extreme low-temperature events, leading to a slower pace of stabilization in price.

The fresh food index, including vegetables, fruits, and fish, rose 12.1 percent. The index encompasses the food products with higher price volatility due to weather events or seasonal changes, and the increase was the highest in almost 13 months.

Core inflation, which excludes unstable agricultural produce and petrol prices, recorded a rise of 3.6 percent compared to the previous year. CPI for living necessaries rose 4.6 percent.