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Data say prices are stabilizing. Consumers beg to differ.

Published: 06 Apr. 2025, 19:34

A customer shops at a supermarket in central Seoul on March 5. [NEWS1]

While official inflation indicators suggest that consumer prices are stabilizing, many Koreans say they are not feeling the effects in their daily lives.

According to Statistics Korea, monthly consumer price index (CPI) growth has remained in the low 2 percent range — the Bank of Korea’s inflation target — for three consecutive months this year. The government maintains that inflation is under “stable management.”

Yet public sentiment tells a different story. Experts point to two main reasons for such disaccord.

First, prices surged sharply during the Covid-19 pandemic years, pushing the baseline far higher. Even with more moderate inflation rates in recent months, consumers are still grappling with elevated prices. As of March, the CPI had risen around 16.3 percent compared to the 2020 annual average, according to Statistics Korea.

Second, prices for everyday necessities — items consumers purchase frequently — have continued to climb at a faster pace.

The consumer price index for living necessities, known as the cost of living index which tracks 144 high-purchase frequency and high-expenditure goods out of the 458 total items in the CPI basket, rose 2.4 percent on year in March. That followed increases of 2.5 percent in January and 2.6 percent in February.

A shopper looks at Samyang Foods' Buldak Ramen products at a supermarket in Seoul on March 19. [YONHAP]

Prices for processed food and dining out — closely tied to daily life — have seen particularly steep increases.

Processed food prices rose 3.6 percent in March compared to a year earlier, the highest jump in 15 months since December 2023. That followed rises of 2.7 percent in January and 2.9 percent in February.

Dining-out prices increased steadily: 2.9 percent in January, and 3 percent each in February and March. Analysts say these trends are largely driven by a series of price hikes from major food and restaurant companies.

Looking ahead, the cost of living index is expected to be on the rise.

Park Byeong-seon, head of price statistics at Statistics Korea, warned that the effects of recent wildfires in North Gyeongsang could begin to show up in food prices as early as next month. The affected region is a major producer of spring cabbage, garlic, dried chili peppers, onions, apples and plums.

Unusual weather patterns also pose risks. Forecasts suggest another year of extreme heat, further adding to inflation uncertainty.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY KIM MIN-JOONG [[email protected]]