February Consumer Prices Rise 3.7%... 3% Range for 5 Consecutive Months (Update)

[Asia Economy Sejong=Reporter Kim Hyewon] Last month, consumer prices rose in the 3% range for the fifth consecutive month. In particular, the core inflation rate (index excluding agricultural products and petroleum) increased by 3.2% compared to the same month last year, marking the largest increase in 10 years and 2 months. The index excluding food and energy recorded the largest increase since September 2006.

Statistics Korea announced on the 4th that the consumer price index for February was 105.30 (2020=100), up 3.7% from the same month last year.

Consumer prices in February continued the 3% range increase for the fifth consecutive month since October last year (3.2%). The consumer price inflation rate was 3.8% in November, 3.7% in December, and 3.6% in January.

The consumer price inflation rate recorded over 3% for 18 consecutive months from September 2010 to February 2012, then fluctuated below 2%, before rising to the 3% range again in October last year after 9 years and 8 months.

The core inflation rate (index excluding agricultural products and petroleum) rose 3.2% compared to the same month last year. This is the largest increase since December 2011 (3.6%). The index’s inflation rate has remained in the 3% range for two consecutive months since last month.

The core inflation rate excluding food and energy rose 2.9%, showing the largest increase since September 2006 (3.0%).

Looking at the inflation rate by item in February, prices of industrial products rose 5.2% year-on-year, and service prices increased by 3.1%. Electricity, gas, and water prices rose by 2.9%, and agricultural, livestock, and fishery products increased by 1.6% respectively.

The living cost index, which explains the perceived inflation rate, rose by 4.1%.

Eo Unseon, Director of Economic Trend Statistics at Statistics Korea, explained the rise in core inflation, saying, "Excluding seasonal factors and temporary shock factors, personal services, durable goods, and processed foods remain, and their contribution to inflation continues to increase." He added, "Demand-side inflation factors are also increasing, and while consumer sentiment fluctuates amid ongoing economic recovery, it is fundamentally on an upward trend, creating demand-side inflationary pressure."

Regarding the outlook for consumer prices in March, he said, "There is concern that inflation will worsen further due to external inflation factors such as rising international oil prices, grain prices, global supply disruptions, and geopolitical risks including the Ukraine situation," and added, "It is unlikely that the upward trend will slow down next month."

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