Inflation over 3% for fourth month in a row
According to Statistics Korea on Friday, consumer prices in January rose 3.6 percent year-on-year, the fourth consecutive month they rose more than 3 percent.
Prices grew on all fronts but especially briskly in agriculture, fishery and livestock and petroleum goods, affecting not only grocery bills but also the cost of manufactured goods.
“This month consumer price rose 3.6 percent as manufactured goods including petroleum goods and processed food as well as agriculture, fishery and livestock prices continued to increase and services prices centered on dining out further expanded,” said Eo Un-seon, Statistics Korea's director.
Agriculture, fishery and livestock prices grew 6.3 percent compared to a year earlier. Fresh produce prices were up 6 percent.
Strawberry prices surged 45 percent on-year while Napa cabbage prices rose 56.7 percent.
Imported beef prices rose 24 percent and pork increased 10.9 percent.
But some agriculture prices went down including green onions, which fell 37 percent, apples (16 percent) and chili peppers (11.5 percent).
Manufactured goods prices grew 4.2 percent driven by rising oil prices.
Petroleum, diesel, kerosene and gas prices were up 16.4 percent. Among oil-related prices, the price of automotive LPG surged 34.5 percent. International prices have spiked because of intensifying tensions between Europe and Russia.
Petroleum prices grew 12.8 percent while diesel increased 16.5 percent.
The price of services was up 2.9 percent.
Among services, dining out increased 5.5 percent on-year.
Core consumer prices, which exclude volatile agriculture, fishery and livestock and oil prices, rose above 3 percent for the first time in a decade.
That signals that the current inflationary pressure may not be temporary, and if the economic growth slows, it might lead to stagnation.
Inflationary pressure continues to mount with geopolitical tensions between Russia and western countries over Ukraine and more spending domestically.
The government proposed a 14 trillion-won supplementary budget, which will add liquidity to the market.
Worries over ongoing supply bottlenecks and the Omicron variant prompted the International Monetary Fund last month to lowered Korea’s economic growth forecast to 3 percent from a projection in October of 3.3 percent.
Finance Minister Hong Nam-ki apologized Friday for the government's failure to control inflation.
“[January’s] is lower than the 3.7 percent increase in December,” Hong said while appearing at a National Assembly Strategy and Finance Committee hearing about the supplementary budget. “Yet I apologize for [consumer prices] still being high.”
In December, the government set its economic growth goal for this year at 3.1 percent while and its consumer price increase goal at 2.2 percent.
Hong said there is not much the government can do as consumer price increases are driven by external factors.
BY LEE HO-JEONG [email@example.com]