October Consumer Prices Up 5.7%... Inflation Rate Increases After Three Months (Update)

Statistics Korea October Consumer Price Trends

[Asia Economy Sejong=Reporters Kim Hyewon and Kwon Haeyoung] The consumer price inflation rate in October recorded 5.7%. After two consecutive months of slowing inflation in August and September, the consumer price index increased its month-on-month growth rate for the first time in three months. Although the price increases of petroleum products and agricultural, livestock, and fishery products slowed down, the rise in electricity, gas, and water prices expanded.

According to the 'October Consumer Price Trends' released by Statistics Korea on the 2nd, the consumer price index last month was 109.21 (2020=100), up 5.7% compared to the same month last year.

The consumer price inflation rate rose to the 6% range in June (6.0%) and July (6.3%), reaching the highest level since the foreign exchange crisis, then gradually slowed to the 5% range in August (5.7%) and September (5.6%). However, it rose again after three months.

By item, electricity, gas, and water prices increased by 23.1%, driving the overall inflation trend. This is the highest increase since statistics began being compiled in January 2010. The contribution of electricity, gas, and water prices to overall inflation expanded from 0.48 percentage points in September to 0.77 percentage points in October.

Petroleum products rose 10.7%, and processed foods increased 9.5%, resulting in a total 6.3% rise in industrial products. The contribution of industrial products decreased from 3.24 percentage points in June to 2.32 percentage points in September and further to 2.20 percentage points in October. In particular, the inflation rate of petroleum products, which has been a major driver of high inflation this year, peaked at 39.6% in June and has been slowing down to 35.1% in July, 19.7% in August, and 16.6% in September.

Agricultural, livestock, and fishery products also rose 5.2%, lower than the previous month's 6.2%. Agricultural products increased by 7.3%, slowing from 8.7% in the previous month, while vegetables and livestock products rose by 21.6% and 1.8%, respectively. Meanwhile, fishery products rose 6.5%, slowing compared to 4.5% in the previous month.

The personal services inflation rate remained at 6.4%, the same as the previous month (6.4%), maintaining the highest level since April 1998 (6.6%). Dining out rose 8.9%, and other personal services outside dining increased by 4.6%.

The core inflation rate, which excludes agricultural products and petroleum products and reflects the underlying inflation trend, rose 4.8%, increasing from 4.5% in the previous month. The index excluding food and energy rose 4.2%, expanding from 4.1% in the previous month.

The living cost index, composed mainly of frequently purchased items and closer to the perceived inflation rate, rose 6.5%, the same as the previous month's increase (6.5%).

Eo Unseon, Director of Economic Trend Statistics at Statistics Korea, explained, "Although the price increases of industrial products such as petroleum and agricultural, livestock, and fishery products have slowed, the rise in electricity, water, and gas prices has expanded, increasing the inflation rate." He added, "We need to observe how inflation will develop in the future, but we do not expect it to rise to 6%. It is possible that July was the peak of inflation."

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