Consumer prices up 3.7 percent on-year in September

Economy

Published: 05 Oct. 2023, 17:03 Updated: 06 Oct. 2023, 16:37

Consumer prices up 3.7 percent on-year in September

People shop for food at a supermarket in Seoul on Oct. 3. [YONHAP]

Korea’s consumer prices rose 3.7 percent on-year in September as prices for oil and agricultural products rose, according to Statistics Korea on Thursday.

The growth rate rose 0.3 percentage points on-month, remaining above 3 percent for the second consecutive month after hovering between 2 and 3 percent in June and July.

Consumer prices for agricultural, livestock and fishery products rose 3.7 percent on-year in September, while those for electricity, gas and water soared 19.1 percent in the same period. Consumer prices for industrial products and services grew 3.4 percent and 2.9 percent, respectively.

“Consumer price growth has generally been declining after peaking at 6.3 percent in July of last year,” the Ministry of Economy and Finance said in a statement.

It said the on-year rise reflects “a rise in global oil prices as a result of a protected production cut by OPEC+ in September and partial rise in agricultural prices as a result of abnormal conditions.”

Dubai Brent crude rose to $91 as of Oct. 3, up from around $75 in June.

“Global oil prices will continue staggered growth in October, but consumer prices are projected to stabilize as agricultural prices gradually steady as the harvest season begins,” the ministry said.

The ministry “will strengthen monitoring while closely observing how financial markets unfold inside and outside Korea,” said Finance Minister Choo Kyung-ho.

Choo added the ministry will prevent uncertainties in the foreign exchange market caused by speculative transactions and promised to take timely measures, including bond market stabilization measures.

Financial markets recently experienced a rise in volatility as yields on U.S. government bonds soared. The yield on 30-year U.S. treasuries hit a 16-year high on Tuesday. The yield on Korea's 30-year treasuries also hit 4.199 percent on Wednesday to reach its highest level this year.

Core inflation, excluding volatile food and energy prices, rose 3.3 percent on-year, remaining unchanged from a month earlier.

“The consumer price index is projected to slow down from October, and the trend will continue with the index reaching around 3 percent by the year-end,” the Bank of Korea said in a statement.

“Growth in core inflation is also projected to slow on weakened demand-side pressure and base effects.”

However, the bank warned that uncertainties remain high, including global oil prices, the value of the won against the dollar and domestic and global economic trends.

The Bank of Korea has kept the policy rate steady at 3.50 percent since January amid moderating inflation.

The next Monetary Policy Board meeting is scheduled to take place on Oct. 19.

BY JIN MIN-JI [jin.minji@joongang.co.kr]