Korean inflation ticks up 0.1 points to 5.7 percent in October

Economy

Published: 02 Nov. 2022, 17:14 Updated: 02 Nov. 2022, 19:29

Korean inflation ticks up 0.1 points to 5.7 percent in October

Electricity meters installed on the wall of a building in Seoul on Wednesday. Consumer prices rose 5.7 percent, and utility prices contributed to the rise. [YONHAP]

Inflation was 5.7 percent in October, the sixth consecutive month above 5 percent.

The rate is up 0.1 percentage points from the month earlier.

Core inflation, which excludes agricultural and energy prices, was 4.8 percent, the highest since February 2009.

The statistics agency cited the sharp increase in utility rates and individual service prices, including the cost of eating out and getting a hair cut, contributed to the continuing increase in consumer prices.

It noted that the slow growth of fish, meat and agricultural prices helped temper inflation.

“Basically, if this trend continues, we expect inflation to be 6 percent” full year, said Eo Woon-sun, Statistics Korea senior official on short-term economic statistics. “We think it peaked in July.”

In July, inflation was 6.3 percent, the highest in 24 years.

“As energy and raw material prices have stabilized, and due to government policies, consumer price growth will likely be in the 5 percent range,” Finance Minister Choo Kyung-ho said last year.

Last month, utility rates rose 23.1 percent as the government increased gas and electricity prices.

Service prices rose 6.4 percent on year. This is the second consecutive month in which service prices were up more than 6 percent.

The last time service prices rose this quickly was in 1998.

The price of dining out rose 8.9 percent year-on-year. In September, dining out prices surged 9 percent, the sharpest increase in 30 years.

Prices at chicken restaurants were up 10.3 percent. Raw fish restaurant prices rose 9.2 percent.

Manufactured goods prices rose 6.3 percent year-on-year due to the 10.7 percent increase in oil prices, while processed food prices increased 9.5 percent.

While gasoline prices dropped 2 percent year-on-year, diesel continued to rise, increasing 23.1 percent.

Agriculture, fishery and livestock prices were up 5.2 percent.

Vegetable prices rose 21.6 percent. Napa cabbage price surged 72.8 percent, while radish prices soared 118.1 percent.

Pork prices rose 3.3 percent, while Korean beef prices fell 1.8 percent. Rice prices dropped 15 percent.

Imported beef prices rose 6.3 percent.

The statistics agency official warned against expecting any certainty.

“Oil prices could again become unstable with the decision by OPEC+ to cut back production,” Eo said. “Also, we cannot exclude completely the possibility of grain prices rebounding with Russia weaponizing food.”

Since last week, Russia has resumed its military blockade that halted Ukraine’s grain exports.

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