[Weekly Review] Prices Soar from Early Year... January Export Amount Hits 'Record High'

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] Consumer prices in January jumped 3.6% compared to the same month last year, marking a four-month streak of 3% range increases. Since the beginning of the year, prices for various dining-out expenses, agricultural and marine products have all risen simultaneously, and oil prices are also showing signs of a sharp surge. There are forecasts that inflation will continue for the time being.

January consumer prices rise 3.6%... four consecutive months in the 3% range

According to the 'January Consumer Price Trends' announced by Statistics Korea on the 4th, the consumer price index last month was 104.69 (2020=100), up 3.6% from the same month last year. After October last year (3.2%), November (3.8%), and December (3.7%), the inflation rate remained in the 3% range for four consecutive months including last month. This is the first time in nearly 10 years since February 2012 that prices have shown a 3% range increase for four consecutive months.

Eo Un-seon, Director of Economic Trend Statistics Review at Statistics Korea, explained, "Prices of industrial products and agricultural, livestock, and fishery products continued to rise, while the price increase of personal services, centered on dining out, expanded."

The main driver of price increases in January was petroleum products (16.4%). Gasoline (12.8%), diesel (16.5%), and automotive LPG (34.5%) all rose by double digits.

Processed foods such as bread (7.5%) also rose 4.2%, and agricultural, livestock, and fishery products increased by 6.3%. In particular, livestock products such as pork (10.9%), imported beef (24.1%), domestic beef (6.9%), and eggs (15.9%) rose 11.5%. Agricultural products such as strawberries (45.1%) also increased by 4.6%.

Electricity, gas, and water, which had been relatively stable with a rise rate in the 1% range until the end of last year, rose 2.9%, showing the largest increase since September 2017 (7.9%). In addition, personal services such as dining-out expenses (5.5%), insurance service fees (13.4%), and apartment management fees (4.3%) all rose simultaneously.

The core inflation rate (index excluding agricultural products and petroleum products), which shows the underlying trend of prices, rose 3.0%. It is also the first time in 10 years since January 2012 (3.1%) that core inflation has risen to the 3% range. The living cost index, which reflects perceived inflation, rose 4.1%.

The problem is that prices may face further upward pressure based on rising international oil prices. The spot price of Dubai crude oil, the crude oil imported into Korea (based on the Singapore Exchange), has risen to $88 per barrel, and there are forecasts that it will surpass $100 due to geopolitical risks arising from the recent Russia-Ukraine situation.

Director Eo said, "While demand-side factors contributed to the high inflation rate, external supply-side factors such as rising international energy prices and global supply chain disruptions also played a significant role," adding, "It is highly likely that a considerable upward trend will continue for the time being."

January exports $55.32 billion... 'Highest ever'

Exports last month recorded a double-digit growth rate, setting a record for the highest January performance ever. This achievement was made despite the resurgence of COVID-19 due to the Omicron variant and rising raw material prices. However, the scale of the trade deficit increased due to the global surge in energy prices.

According to the Ministry of Trade, Industry and Energy's announcement on the 1st, January exports amounted to $55.32 billion, up 15.2% from the same month last year, and imports increased 35.5% to $60.21 billion. The trade balance recorded a deficit of $4.89 billion. This is the first time monthly exports in January have exceeded $50 billion.

Looking at export performance by item, semiconductors (24.2%), petrochemicals (40%), and general machinery (14.1%) showed high growth rates. In particular, exports of petroleum products (88.4%) and steel (50.1%) led the overall export growth.

By region, exports to China increased by 13.1%, and exports to the United States rose by 1.6%. Exports to the Association of Southeast Asian Nations (ASEAN) and the European Union (EU) increased by 28.9% and 13.3%, respectively.

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