Consumer prices only rose 5.7% in August

Economy

Published: 02 Sep. 2022, 14:32

Consumer prices only rose 5.7% in August

Customers crowd a traditional market in Dongdaemun, Seoul, on Friday ahead of the Chuseok holidays later this month. While consumer price rose 5.7 percent, the statistics agency cautiously projected that inflation growth could be limited for this month even with rising demand related to the Chuseok holidays. [YONHAP]

Consumer prices grew 5.7 percent in August, according to Statistics Korea on Friday, a needed cooling off.

The rise was smaller than in the last two months and the first decline compared to the previous month since January.

Slower growth in August reflected a stabilization in international crude prices.

The price of petroleum products in Korea grew 19.7 percent year-on-year compared to 35.1 percent in July.

Gasoline prices grew 8.5 percent while diesel surged 30 percent.

Prices of manufactured goods grew 7 percent, slower than the July's 8.9 percent increase.

Food prices continued to rise, affected by heavy rains.

Agriculture, fishery and livestock prices were up 7 percent, the same as in July.

Vegetable prices surged nearly 28 percent, contributing to a 10.4 percent increase in agricultural goods.

Napa cabbage, used in making kimchi, saw prices rise 78 percent. Cucumber prices were up 69.2 percent and green onions 48.9 percent.

Imported beef prices grew 19.9 percent and pork was up 3.8 percent.

However, the price of rice fell 16.5 percent and eggs 10 percent.

The price of services, which includes restaurants, coffee shops and hair salons, were up 6.1 percent.

Restaurant prices grew 8.8 percent, the steepest year-on-year hike since October 1992's 8.8 percent.

Price at chicken joints were up 11.4 percent.

Public utility prices rose 15.7 percent after the government allowed modest hikes in electricity and gas bills.

A recent report by Statistics Korea found that spending declined 1.9 percent in July compared to a year ago. It was the second month in which consumers cut back on spending.

The statistics agency said it doesn't expect consumer prices to spike in September, even with demand pressure from the Chuseok holidays.

“The demand caused by Chuseok will likely be a factor,” said Eo Woon-sun, a Statistics Korea official. “But we expect that increase to be limited as consumer prices in September last year grew relatively sharply.”

One wild card is the international oil price.

“The surge in the international crude price has recently softened,” Eo, said. “However, there is still instability in the market as oil producers expressed the possibility of supply cutbacks.”

In May, the Bank of Korea projected consumer prices would rise 4.5 percent this year. Last month, it raised the projection to 5.2 percent. If so, it would be the sharpest increase in 24 years.

It lowered its growth outlook from 2.7 to 2.6 percent.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]