April Consumer Prices Up 0.1%... First 0% Range This Year Due to COVID-19 Impact (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Kwangho Lee] Due to the impact of the novel coronavirus infection (COVID-19), consumer prices last month showed a rise in the 0% range, marking the lowest level in six months.

According to the 'April Consumer Price Trends' released by Statistics Korea on the 4th, the consumer price index in April was 104.95 (2015=100), up 0.1% compared to the same period last year.

This is the lowest level in six months since October last year (0%). The implementation of 'social distancing' to prevent the spread of COVID-19 reduced demand for dining-out services, petroleum prices dropped sharply, and public service prices fell due to the implementation of free education.

The consumer price inflation rate maintained the 1% range for three consecutive months from January (1.5%), February (1.1%), and March (1.0%) this year, but fell back to the 0% range after four months.

By item, due to the impact of COVID-19, as more meals were taken at home, prices of agricultural, livestock, and fishery products rose by 1.8%. In particular, vegetable prices jumped 10.3% compared to the same period last year, and livestock products (3.5%) and fishery products (8.1%) also increased. On the other hand, industrial products fell by 0.7%, with petroleum prices dropping 6.7% due to the decline in international oil prices.

Service prices also rose by only 0.2%. Dining-out prices increased by 0.8%, remaining in the 0% range for four consecutive months. Avoidance of interpersonal contact led to a decrease in travel-related services. Hotel accommodation fees fell 6.8% compared to the same period last year. Public service prices also dropped 1.6% year-on-year due to free high school education implemented because of COVID-19.

The living cost index, which reflects the perceived inflation focusing on 141 items with high purchase frequency and expenditure share, rose 0.3% compared to the same period last year. The fresh food index, reflecting prices of 50 items such as fish, seafood, vegetables, and fruits that fluctuate greatly depending on weather conditions or seasons, rose 2.9% year-on-year.

Core inflation, excluding food and energy, rose by only 0.1%, marking the lowest level in 20 years and 4 months since December 1999 (0.1%) during the late International Monetary Fund (IMF) foreign exchange crisis.

Meanwhile, in April, mask prices were recorded at 1,720 won offline and 3,050 won online. Online mask prices were found to have dropped to the 2,900 won range over the past weekend.

Hyungjun Ahn, Economic Trend Statistics Officer at Statistics Korea, explained, "Changes in consumption patterns due to COVID-19 have affected prices. As people refrained from going out, demand for dining out decreased, resulting in a low inflation rate for dining-out prices. The sharp decline in petroleum prices due to falling international oil prices and the drop in public service prices due to free high school education are the main reasons for the low inflation rate."

This content was produced with the assistance of AI translation services.