Inflation slows to 11-month low in June but fresh fruit prices stay high

Economy

Published: 02 Jul. 2024, 08:55 Updated: 02 Jul. 2024, 18:45

Inflation slows to 11-month low in June but fresh fruit prices stay high

Customers shop for fresh fruits at a discount mart in Seoul. [YONHAP]

Korea’s inflation decelerated to an 11-month low in June.

The consumer price index, a key measure of inflation, rose 2.4 percent on year last month, according to data compiled by Statistics Korea released Tuesday.

The yearly increase rate was the lowest since the 2.4 percent jump recorded in July of last year.

The on-year increase in consumer prices has been declining for three consecutive months.

Headline inflation fell below the 3 percent mark for the first time in six months in January, only to rebound to 3.1 percent in February and March before falling to 2.9 percent in April. The figure inched down to 2.7 percent in May.

On a monthly basis, consumer prices declined 0.2 percent, marking the first on-month decrease since November of last year.

Fresh food prices, however, continued to drive inflation.

Prices of fresh food products decreased 2.8 percent from the previous month but increased 11.7 percent from the same period last June.

Fresh fruit prices saw a 31.3 percent on-year jump this June.

Core inflation, which excludes volatile food and energy prices, remained flat from the previous month at 2.2 percent after decelerating by 0.1 percentage point in May.

The cost-of-living index, which tracks the price changes of 144 types of frequently purchased consumer goods and services, rose 2.8 percent, once again slowing from the previous month’s on-year gain of 3.1 percent.

"If there is no additional upward inflationary pressure going forward, consumer prices are likely to trend stably toward the low- to mid-2 percent range through the latter half of the year, in line with the government's initial projection," said Kim Byoung-hwan, the first vice minister of economy and finance, during a vice-ministerial meeting on inflation held at the government complex in central Seoul on Tuesday.

However, the vice minister also noted that "inflation felt by the general public still remains strong due to accumulated increases in consumer prices, and there are concerns about uncertainties involving the impact of the summer weather and volatility in global oil prices in July," saying that the government will continue to rein in the cost of living.

The Bank of Korea projected the country's headline inflation to fall below 2.5 percent in the latter half of the year in its revised economic forecast published in May. The annual projection for headline inflation was kept at 2.6 percent, and core inflation at 2 percent.

Update, July 2nd: Added statement from the Ministry of Economy and Finance and details about the inflation forecast from the Bank of Korea.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]