Consumer prices see slow growth in September
Considering a hike in cigarette prices starting this January, prices effectively dipped below zero, economists in Seoul have pointed out.
Low global oil prices continued to contract inflation, pushing overall prices down by 0.95 percentage point, the Ministry of Strategy and Finance said in an analysis Friday. A glut in agricultural products also dragged down prices.
The government’s efforts to stimulate household spending also affected inflation. A 30-percent cut in consumption taxes on automobiles starting Aug. 27 until the end of this year pushed down the average price of mid-sized cars by 2.6 percent and large-sized ones by 1.4 percent year-on-year.
The earlier-than-usual start of the Korea Grand Sale also decelerated inflation, the Finance Ministry analysis said.
“The reduced consumption taxes and Korea Grand Sale put downward pressure on manufactured product prices,” said Kim Bo-gyeong, a Statistics Korea official, at a briefing. “Demand for agricultural products rose ahead of the Chuseok holidays, but their prices didn’t surge significantly.”
The government expects consumer prices to rebound at the end of this year as the aftermath of the plunge in global oil prices would fizzle, the Finance Ministry analysis said.
More data from Statistics Korea showed Friday that retail sales rose only 0.3 percent in August year-on-year, mounting to 29.3 trillion won.
Korean consumers spent less on items for fashion and beauty. Cosmetics, shoes and bags fell in retail sales, in particular, despite the fact they were favorites for female consumers.
Year-on-year, sales of cosmetics in August dipped 8.6 percent, while shoes and bags dropped 6.9 percent. Spending on clothes also contracted 2.8 percent during the same period.
Sales in books also fell 5.2 percent, particularly at online stores, as the government has banned discounts on retail prices that exceed 10 percent at online bookstores.
Although overall spending is shrinking, people increasingly prefer online shopping than retail stores, data showed.
The sales in online shopping stood at 4.3 trillion won in total in August, rising 11.3 percent from the same period last year.
In particular, sales via smartphones skyrocketed 52.4 percent to 2- trillion won year-on-year, accounting for nearly half of total online sales.
Online shopping increased for cosmetics by 28 percent, and for pet products by 22.5 percent. Home appliances and telecommunication devices such as cellphones were also popular at online shops, rising by 19 percent in total.
BY KIM HEE-JIN [firstname.lastname@example.org]