January Inflation Rate Falls to 2.0%, Lowest in 5 Months... Processed Food Prices Still Rising (Comprehensive)

International Oil Prices Stabilize; Processed Foods Up 2.8%
Sharp Price Increases for Lettuce, Cucumber, and Other Seasonal Vegetables
Lee Hyungil: "Holiday Livelihood Stabilization Measures to Proceed Smoothly"

The consumer price inflation rate for January slowed to 2.0%, down 0.3 percentage point from 2.3% in December last year. Falling international oil prices and stable agricultural prices pulled overall inflation down. However, food prices, especially for processed foods and certain livestock and fishery products, are still cited as a burden on households. This is because prices of processed foods, where cost pressures have accumulated, and of major holiday-season items are structurally resistant to decline.

According to the National Data Office on the 3rd, the consumer price inflation rate in January rose 2.0% year-on-year, marking the smallest increase in five months. The inflation rate recorded 2.1% in September last year, 2.4% in October and November, and 2.3% in December, with the pace of increase narrowing for two consecutive months through January.

The biggest factor behind the slowdown this month was a sharp drop in petroleum prices. Petroleum prices, which had risen 6.1% year-on-year in December last year, fell to 0.0% in January this year. This was due to international crude oil prices falling from an average of 80.4 dollars per barrel in January last year to 61.7 dollars in January this year. During the same period, the exchange rate showed little change, moving from 1,455 won to 1,458 won, but the impact of the drop in international oil prices was greater. Gasoline and diesel prices also fell by more than 2% each from the previous month, easing price pressures in the transportation sector. Lee Dowon, Director of Economic Trend and Statistics Review at the National Data Office, analyzed, "The simultaneous slowdown in the pace of increase for agricultural, livestock, and fishery products and petroleum prices was the key factor behind the overall decline in inflation."

Prices of agricultural, livestock, and fishery products also showed a notable slowdown in their rate of increase. Their prices decelerated from 4.1% in December last year to 2.6% in January this year, the lowest increase in four months since September last year (1.9%). For agricultural products, the rate fell from 2.9% to 0.9%, as shipments and imports of some fruits and vegetables increased. In the case of tangerines, prices fell from 15.1% in December last year to 5.3% in January this year. Vegetable prices also saw their rate of decline widen from 5.1% to 6.6%, driven by an expansion in cultivation area and increased production of winter vegetables such as cabbage and radishes.

Ahead of the Lunar New Year holiday, gift sets for the holiday are displayed on February 2 at the Nonghyup Hanaro Mart Yangjae branch in Seocho-gu, Seoul. Nonghyup Distribution will officially sell the Lunar New Year gift sets from today until the 16th. 2026.2.2 Photo by Kang Jinhyung

However, not all vegetable prices were stable when viewed on a month-on-month basis. Lettuce (26.9%), cucumbers (21.8%), perilla leaves (27.5%), and zucchini (39.8%) saw sharp short-term price spikes due to a sudden drop in temperatures. Director Lee explained, "On a year-on-year basis, prices are falling due to base effects, but on a month-on-month basis, weather-sensitive items have temporarily risen."

Despite the slowdown in the overall inflation rate, prices of processed foods and livestock and fishery products continue to increase the perceived burden on consumers. Processed food prices in January rose 2.8% year-on-year. Due to base effects after sharp increases in processed food prices over the past two years, the rate of increase itself has fallen from the 4% range to the 2% range, but some items such as instant noodles (8.2%), bread (3.3%), and chocolate (16.6%) are still recording high growth.

In particular, chocolate prices have been rising continuously over the past four to five years. After climbing 15.8% in 2023, 9.3% in 2024, and 17.0% in 2025, they again posted an increase of more than 16% in January this year. This is seen as the result of accumulated increases in raw material prices and labor costs, and analysts say it will be difficult for prices to stabilize in the short term. The National Data Office stated, "Processed foods have recorded high growth rates over the past two years as the impact of raw material and labor costs has accumulated," adding, "Although the pace of increase has slowed this year, some items still pose a significant burden."

Livestock and fishery products also continued to rise at a faster pace than overall inflation. Livestock products rose 4.1%, and fishery products 5.9%. Domestic beef prices increased 3.7%, pork 2.9%, and imported beef 7.2%. While the rate of increase for pork slowed due to higher shipment and import volumes, imported beef continued to be affected by higher import prices. Egg prices rose 6.8% year-on-year, maintaining a high level due to reduced shipments caused by the spread of highly pathogenic avian influenza (AI).

Lee Hyungil, Deputy Minister of Finance and Economy, is presiding over an emergency market situation inspection meeting held on the 3rd at the Government Seoul Office in Jongno-gu, Seoul. Ministry of Finance and Economy

Regarding concerns about rising prices of key Lunar New Year holiday items, the government assessed that the full impact of the holiday has not yet been reflected. Director Lee said, "The high prices of livestock and fishery products reflect a recent structural trend, and it is difficult to view them as having suddenly risen just ahead of this Lunar New Year," adding, "However, as demand may increase ahead of the February holiday, relevant ministries will simultaneously implement price stabilization measures for key holiday items."

Service prices showed a relatively solid trend. In January this year, service prices rose 2.3%, while personal services increased 2.8%. However, due to base effects from last year's Lunar New Year holiday, the rate of increase for travel and lodging-related items slowed. Lee Hyungil, First Vice Minister of Finance and Economy, said, "The 2.0% consumer price inflation rate in January, which is in line with the price stability target, was driven by a slowdown in the rise of agricultural, livestock, and fishery product prices and by petroleum prices turning flat. However, the continued strength of some food items is still weighing on ordinary people," adding, "We will thoroughly implement measures to stabilize people's livelihoods during the Lunar New Year and make every effort to stabilize the prices and supply-demand conditions of agricultural, livestock, and fishery products."

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