Inflation rises 3.1 percent in March on agricultural products
Published: 02 Apr. 2024, 17:12
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- JIN MIN-JI
- [email protected]
![Consumer prices, a key gauge of inflation, gained 3.1 percent in March from a year earlier, according to the data from Statistics Korea on Tuesday. It was driven by agricultural products, including apples and tangerines. A customer shops in a supermarket in Seoul on the day. [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2024/04/02/f17a686a-bf41-49c6-bb86-428c153d00fd.jpg)
Consumer prices, a key gauge of inflation, gained 3.1 percent in March from a year earlier, according to the data from Statistics Korea on Tuesday. It was driven by agricultural products, including apples and tangerines. A customer shops in a supermarket in Seoul on the day. [NEWS1]
Korea’s inflation grew more than 3 percent for the second straight month in March, largely driven by prices of agricultural products.
Consumer prices, a key gauge of inflation, gained 3.1 percent from a year earlier, according to data from Statistics Korea on Tuesday. The on-year figure stayed unchanged from February after coming in at 2.8 percent in January.
Inflation last month was led by an overall price jump in agricultural, livestock and fishery products, which advanced 11.7 percent on year in March compared to an annual gain of 11.4 percent the previous month.
Agricultural products soared 20.5 percent in March after gaining 20.9 percent in February on the back of apple prices, which skyrocketed 88.2 percent. It was the most rapid growth since data was first compiled in January 1980. The price of pears also soared 87.8 percent while that of tangerines accelerated 68.4 percent in March.
President Yoon Suk Yeol on the day vowed to inject an “unlimited” amount of funds with the intent of reining in agro and livestock products “without a time frame” until people feel that prices have stabilized.
Yoon added that the government will expand eligibility for support measures currently centered on major supermarkets to include small and mid-sized stores and traditional markets. Qualification for agricultural vouchers targeting vulnerable social groups will be also broadened.
“The price growth of agro and livestock products has started to slow somewhat from late March, but remains high,” said Yoon. “We will have to thoroughly prepare for climate change, which has become the new normal,” he added, as atypical weather has been partially blamed for the recent price surge.
The president promoted the utilization of digital technologies like artificial intelligence to run orchards and develop new breeds of agricultural products.
The stabilization pledge by Yoon comes ahead of the election on April 10, the outcome of which will affect his ability to execute his policies for the rest of his term before leaving office in 2027.
Core inflation, which excludes volatile food and energy prices, grew 2.4 percent in March, slowing from a 2.5 percent gain in February.
“The government will put in the utmost effort to quickly bring inflation to the 2 percent range amid uncertainties, including volatility in international oil prices as well as agricultural prices that remain high due to aggravated weather conditions,” said the Ministry of Economy and Finance.
The Bank of Korea (BOK) has also been doing its part to stabilize inflation by keeping its benchmark interest rate high at 3.5 percent since last January. The central bank said that it will be difficult to cut the benchmark rate in the first half of the year as it needs more evidence confirming that inflation is on a sustainable path down to the target 2 percent rate.
Core inflation is projected to gradually slow due to a weak recovery in private consumption, said the BOK on Tuesday. Consumer prices are also expected to present a downward trend, but the movement will not be smooth due to the volatility of oil and agricultural prices.
It added that price movement needs to be observed for a longer period before the bank can be certain that inflation is heading toward the target rate. The BOK’s next rate-setting meeting is scheduled for April 12.
The Finance Ministry expects prices in Korea to rise 2.6 percent this year.
BY JIN MIN-JI [[email protected]]
with the Korea JoongAng Daily
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