Consumer prices rise 3.8 percent in October amid global volatility

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Consumer prices rise 3.8 percent in October amid global volatility

Published: 02 Nov. 2023, 16:18 Updated: 02 Nov. 2023, 17:42

JIN MIN-JI
[email protected]

A customer shops for napa cabbage at a supermarket in Seoul on Oct. 10. [NEWS1]

Consumer prices advanced for the third consecutive month in October amid volatility in the global oil and agricultural sectors, according to data that Statistics Korea released on Thursday.

Consumer prices, a key gauge of inflation, advanced 3.8 percent on year in October compared to 3.7 percent in September and 3.4 percent in August. October marked the fastest gain since March.

Inflation has generally declined after peaking at 6.3 percent last July. The figure reached a low of 2.3 percent in July.

Prices for agriculture, livestock and fisheries jumped 7.3 percent last month on-year, a jump from 3.7 percent a month earlier. Vegetables surged 13.5 percent, marking their most rapid growth in 29 months.

Utility services reported a 9.6 percent increase amid rising global energy prices, while the prices of industrial products gained 3.5 percent on-year last month. The service sector rose 3 percent over the same period due to higher insurance and house management costs.

“Slowing of domestic inflation is projected to be more gradual than initially expected due to geopolitical risks in the Middle East and abnormal climate,” which slowed the decline of agricultural product prices, said Finance Minister Choo Kyung-ho during a ministerial meeting held in central Seoul on Thursday.

Choo vowed to make sure all relevant ministries monitor the price and supply and demand for products and to put in effort to stabilize the prices of food, including the ingredients for kimchi ahead of the kimchi making season that usually begins in late November.

The government will immediately activate a system designed to stabilize prices, putting inflation at its top priority, Choo added.

The government will inject 24.5 billion won ($18 million) to stabilize prices for 14 ingredients used to make kimchi, including napa cabbage and radish, and to apply a quota tariff to eight imported fruits and ingredients, including bananas, mangoes and butter.

Core inflation, excluding volatile food and energy prices, rose 3.2 percent on year in October, compared to 3.3 percent in September.

The Bank of Korea (BOK) projects that inflation will stay above 3 percent through the end of this year.

The BOK held its policy rate steady at 3.5 percent for sixth straight meeting last month, citing concerns over high household debt and heightened external uncertainties, including the Israel-Hamas war and global oil prices.

The next rate-setting meeting is scheduled to take place on Nov. 30.

BY JIN MIN-JI [[email protected]]