Oil Prices Surge and Dining Out Costs Soar... January Consumer Prices Rise 3.6% 'Emergency Alert'

January Consumer Price Index at 104.69, Up 3.6% Year-on-Year

[Asia Economy Sejong=Reporter Kwon Haeyoung] The consumer price inflation rate for the first month of the new year recorded 3.6%, surpassing the 3% mark for four consecutive months. Amid the continued rise in international oil prices, prices of industrial products and agricultural and livestock products keep increasing, and dining-out prices have surged significantly, sustaining the high inflation trend.

The Statistics Korea announced on the 4th that the consumer price index for January this year was 104.69, up 3.6% compared to the same month last year. Accordingly, it showed a 3% range increase for four consecutive months following October (3.2%), November (3.8%), and December (3.7%) of last year. Consumer prices recorded a 3% range for 18 consecutive months from September 2010 to February 2012, then moved below 2%, before jumping back to the 3% range starting October last year.

The core inflation rate (index excluding agricultural products and petroleum products), which shows the underlying trend of inflation excluding temporary supply shock effects, rose 3%, reaching the 3% range for the first time in 10 years since January 2012 (3.1%).

Oh Unseon, Director of Economic Trend Statistics at Statistics Korea, said, "Prices continued to rise mainly in petroleum products, processed foods, industrial products, and agricultural and livestock products," adding, "Personal service prices expanded their upward trend centered on dining out, recording a mid-3% increase."

Looking at prices by item, service prices rose 2.9% year-on-year last month. Among these, rent increased by 2.1%, marking the largest rise in 6 years and 1 month since December 2015 (2.5%), and dining out surged 5.5%, the largest increase since June 2009 (5.9%). Industrial products rose 4.2%, and agricultural, livestock, and fishery products increased by 6.3%.

Electricity, gas, and water charges rose 2.9%. Electricity rates showed a significant increase due to the reduction of essential discount rates in July last year and the increase in fuel cost adjustment unit prices in October. Water charges also recorded an upward trend as some local governments adjusted fees to reflect actual costs.

The living cost index, which explains the perceived inflation, jumped 4.1% year-on-year.

Due to recent rises in international oil prices, global supply chain disruptions, and the Ukraine situation, the inflation rate in the 3% range is expected to continue for the time being.

Oh Unseon, Director of Economic Trend Statistics, said, "Since the rise in international oil prices accelerated from late last month, it is uncertain whether the recent slowdown will continue," adding, "Considering the increase in domestic demand, rising international energy prices, and global supply chain disruptions, it is difficult to see external inflationary factors easing, so inflation is likely to continue rising significantly for the time being." He further explained, "However, as we move into the second and third quarters, base effects will appear, and supply-side (shortage) factors will gradually ease, so we hope inflation can stabilize."

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