The Bank of Korea: "Rising Import Prices of Consumer Goods Also Affect Domestic Electronics and Apparel Consumer Prices"

The Bank of Korea Publishes 'Domestic Price Impact of Chinese Inflation Considering the Structure of Mass Imports'

On the 20th, with cool weather continuing in the mornings and evenings, autumn clothes are displayed in the shop window of a clothing store in Myeongdong, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Jang Sehee] It is forecasted that domestic consumer prices for home appliances and clothing will rise due to the increase in import prices from China. Additionally, there are concerns that the sharp rise in Chinese prices could stimulate inflation expectations in the future.

According to the report "The Domestic Price Transmission Effect of Chinese Prices Considering the Import Structure from China," analyzed by the Bank of Korea (BOK) in its BOK Issue Note on the 29th, home appliances and clothing have recently seen a significant rise in import unit prices, showing signs of gradually being passed on to domestic consumer prices.

In the case of home appliances, due to parts supply disruptions and logistics difficulties, import unit prices from China and the ASEAN5 countries turned upward from the second quarter of this year, leading to a mild increase in domestic consumer prices in the second half of the year. For clothing, the sharp rise in raw cotton and yarn prices caused import unit prices from China and the ASEAN5 to surge significantly in the fourth quarter of this year, resulting in a somewhat expanded increase in domestic consumer prices.

Furthermore, among imported consumer goods from China and the ASEAN5, the import unit prices of daily necessities and food products have risen sharply this year, which has also expanded the increase in domestic consumer prices for related items.

For durable daily necessities, the rise in raw material prices caused a significant increase in import unit prices from China and the ASEAN5, which in turn expanded the price increase of domestic consumer goods such as furniture and kitchenware. In the case of non-durable daily necessities, the rise in import unit prices from China is also being passed on to domestic consumer prices for items such as detergents and household vinyl products.

In particular, as the import unit prices of Chinese intermediate goods have risen sharply this year, the increase in domestic producer prices for items produced using these intermediate goods has also expanded. The rise in raw material prices such as crude oil and iron ore has caused import unit prices from China to increase significantly, which has also expanded the rise in domestic producer prices. For electronic and optical products, the Bank of Korea explained that the import unit prices from China have risen sharply, centered on semiconductors and display panels, and this increase is being passed on to domestic producer prices.

The Bank of Korea stated, "In the case of home appliances and clothing, recent rises in import unit prices are gradually being passed on to domestic consumer prices," and added, "If the high upward trend continues due to sustained increases in international raw material prices and prolonged supply bottlenecks, it is expected to exert considerable upward pressure on domestic prices."

It also emphasized, "It is necessary to pay attention to the possibility that the continued sharp rise in Chinese prices could stimulate inflation expectations."

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