Egg, Potato, and Apple Prices All Increased... Inflation Rate Highest in 1 Year

Statistics Korea Announces February Consumer Price Trends
Agricultural, Livestock, and Fishery Product Prices Rise at Largest Rate in 10 Years

[Sejong=Asia Economy reporters Kim Hyunjung and Moon Chaeseok] Last month, consumer prices rose by 1.1%, marking the largest increase in a year since the spread of COVID-19. The surge was largely driven by strong prices in agricultural, livestock, and fishery products due to supply and demand instability, along with a sharp rise in jeonse and monthly rent prices, raising concerns about the growing burden on "ordinary people's prices."

According to the "February Consumer Price Trends" released by Statistics Korea on the 4th, the consumer price index last month was 107.00 (2015=100), up 1.1% from the same month last year, the highest increase since February last year (1.1%) when COVID-19 began spreading. This also marked the end of four consecutive months of price increases in the 0% range, from October (0.1%), November (0.6%), and December (0.5%) last year to January (0.6%) this year.

The rise was driven by prices of agricultural, livestock, and fishery products. By category, goods and services rose 1.9% and 0.5%, respectively, compared to the same month last year. Agricultural, livestock, and fishery products jumped 16.2%, marking the largest increase in 10 years since February 2011 (17.1%). Due to poor crop conditions caused by adverse weather, green onion prices surged 227.5%, and apple prices rose 55.2%. Egg prices increased 41.7% due to the culling of laying hens amid the spread of highly pathogenic avian influenza (AI) and a sharp rise in holiday demand. Pork and domestic beef prices, which saw increased household demand, rose 18.0% and 11.2%, respectively.

On the other hand, industrial product prices fell by 0.7%. Petroleum products dropped 6.2%, but the decline slowed compared to the previous month (-8.6%) due to recent rises in international oil prices. Mobile phone prices also fell by 1.6%. Processed food prices rose 1.2%, while electricity, water, and gas prices fell 5.0%. Including agricultural, livestock, and fishery products, industrial products, and electricity, water, and gas, goods prices rose 1.9%.

Services showed mixed trends with limited increases amid continued restrictions on face-to-face contact due to COVID-19. Personal services rose 1.6%, while public services fell 2.1% due to policy effects such as free education. Among personal services, dining-out prices rose 1.3%, and other personal services increased 1.7%. Rent rose 0.9% compared to a year ago, the largest increase in over three years since March 2018 (0.9%). Jeonse and monthly rent increased by 1.2% and 0.5%, respectively.

Amid the economic downturn caused by COVID-19, the livelihood economy has suffered a severe blow, and with inflation continuing, the cost of food is also on the rise every day. According to Statistics Korea on the 25th, the consumer price index in January increased slightly by 0.6% compared to the same period last year, but agricultural, livestock, and fishery products surged by 10%. The photo shows citizens shopping at a large supermarket in Seoul on the same day. Photo by Kim Hyun-min kimhyun81@

The core inflation index, which excludes agricultural products and petroleum products and reflects price trends, rose 0.8%, marking three consecutive months of increases in the 0% range. The fresh food index rose 18.9%, recording the highest increase in four months since October last year (19.9%), and the living cost index, a perception indicator, rose 1.2%. The index excluding food and energy rose 0.3%.

Statistics Korea expects inflation to continue next month. Eo Unseon, Director of Economic Trend Statistics at Statistics Korea, said, "Supply and demand factors for agricultural and livestock products are expected to improve, so they are neutral, but the impact of oil prices could be significant," adding, "Downward pressure on prices is decreasing, but there is a subtle predominance of upward pressure due to expectations of increased demand from economic recovery."

However, despite inflationary factors, a continuous surge in prices is not expected. Director Eo said, "While it is possible to predict that inflationary factors on both supply and demand sides will continue the upward trend, efforts by inflation authorities and economic officials will be in place, and at present, the situation is not considered one that warrants concern about inflation."

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