January Dining Out Price Increase Rate Hits Highest in 13 Years... Upward Trend Expected to Continue for a While

[Asia Economy Sejong=Reporter Son Seon-hee] Last month, the dining-out price index recorded the highest increase in about 13 years. The price surge has accelerated due to supply factors such as rising ingredient costs and minimum wage hikes combined with demand recovery, and this upward trend is expected to continue for the time being.

According to Statistics Korea on the 6th, the dining-out price index increase rate in January (compared to the same month last year) was 5.5%, the highest in 12 years and 11 months since February 2009 (5.6%). Prices of 39 dining-out items, including galbitang (11.0%), raw fish (9.4%), and beef (8.0%), all rose compared to a year ago.

Prices of representative affordable foods such as gimbap (7.7%), hamburgers (7.6%), seolleongtang (7.5%), ramen (7.0%), jajangmyeon (6.9%), chicken (6.3%), samgyeopsal (5.9%), and donkatsu (5.7%) also all increased. Coffee prices rose by 1.6% compared to a year ago.

The surge in dining-out prices is analyzed to be driven by the sharp rise in food ingredient costs, increased labor costs due to minimum wage hikes, and expanded demand.

Last month, prices of agricultural, livestock, and fishery products rose by 6.3%. Processed food prices also increased by 4.2%, marking the highest rise in 7 years and 5 months since August 2014 (4.5%).

Flour prices rose 12.1% compared to the same month last year, and noodles (27.8%), cooking oil (14.4%), milk (6.6%), fish cakes (6.6%), and ham and bacon (5.2%) also rose simultaneously.

While the price increase in the second half of last year was mainly due to external factors such as global supply chain disruptions and rising international oil prices, the recent price surge appears to be caused by expanded domestic demand.

Accordingly, excluding temporary factors, the core inflation rate (index excluding agricultural products and petroleum) rose by 3.0%. This is the first time in 10 years since January 2012 (3.1%) that core inflation has reached the 3% level.

Core inflation is calculated excluding items heavily affected by supply-side factors such as seasonal influences or temporary shocks, so it is generally interpreted as reflecting demand-side price pressures. The government expects that in February, the rise in personal services such as dining-out and processed foods will continue, putting upward pressure on the overall consumer price index.

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