Inflation falls gradually as government cracks down on prices [REWIND 2023]

Korea's inflation grew 3.3 percent in November, down from 5 percent a year earlier. The government has taken various measures to combat inflation.

Customers shop for food at a supermarket in Seoul on Dec. 17. [YONHAP]

Inflation grew 3.3 percent in November, down from 5 percent from a year earlier. Inflation has generally been falling since it peaked at 6.3 percent last July.

The growth fell as low as 2.3 percent in July 2023 but climbed back to above 3 percent in the following month amid strong agricultural product prices led by heavy rainfall and extreme heat waves.

The Bank of Korea, in November, projected that Korea’s inflation would average 3.6 percent this year and 2.6 percent in 2024, an uptick from its August estimates of 3.5 percent and 2.4 percent, respectively.

Inflation is expected to slow in coming months, but the point at which the rate will reach the 2 percent target remains uncertain, the Korean central bank said in a report in December. Potential confounding variables include volatility in oil prices and foreign exchange rates, as well as potential price adjustments in the beginning of 2024, including for public utility fees.

In response to the numbers, the government has extended its tax cuts on fuel consumption, announced plans to lower taxes for domestically produced alcoholic beverages and pressured food companies to cooperate in taming inflation.

It also took measures to curb ‘shrinkflation,’ the practice of reducing the size or quantity of a product while maintaining its original price.

The government announced in December that it would require manufacturers and distributors of food and daily necessities to inform customers of any changes in content, size or ingredients of the products they sell.