Annual Inflation Rate 2.5% This Year... Highest in 10 Years (Update)

Consumer Price Trends

[Sejong=Asia Economy Reporter Son Seonhee] This year, consumer prices soared to the mid-2% range annually, marking the highest level in 10 years.

According to the "December and Annual Consumer Price Trends" released by Statistics Korea on the 31st, the annual consumer price index this year rose by 2.5% compared to last year. This is the largest increase in 10 years since 2011 (4.0%).

The living cost index, which reflects the actual perceived inflation, increased by 3.2% compared to last year, also marking the highest level since 2011 (4.4%).

By item category, agricultural, livestock, and fishery products showed the largest increase, rising 8.7% compared to a year ago. Due to factors such as high oil prices, industrial products rose 2.3%, and services increased by 2.0%. Electricity, gas, and water recorded -2.1%, the only category where prices fell.

The annual consumer price inflation rate surpassing the government’s management target (2.0%) and reaching the mid-2% range is the result of a steeper inflation trend in the second half of the year compared to the first half.

The consumer price index in December rose 3.7% compared to the same month last year. This marks the third consecutive month with a 3% range increase, following 3.2% in October and 3.8% in November. The average inflation rate for the fourth quarter was 3.5%, also the highest since 2011 (4.0%).

Oh Woonseon, Director of Economic Trend Statistics at Statistics Korea, said, "Prices of petroleum products, processed foods, industrial products, personal services, and agricultural, livestock, and fishery products rose, resulting in a mid-2% inflation rate. While demand-side factors contributed, external factors such as rising international oil prices, grain prices, raw material prices, and supply chain disruptions played a major role." Regarding next year’s inflation outlook, he added, "As external factors ease, prices are expected to gradually stabilize, showing a 'high in the first half, low in the second half' trend annually and to be lower than this year."

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