Korea’s inflation at near 24-year high, but appears to slow down

Korea’s inflation at near 24-year high, but appears to slow down

Consumer price growth stays in 6% range for 2nd month in July

By Yi Whan-woo

Korea’s inflation at near 24-year high, but appears to slow down

South Korea’s consumer prices rose 6.3% year-on-year in July, approaching a 24-year high and surpassing the all-time high of 6% set in June, according to Statistics Korea.

The July surge also marks the first time in almost 24 years that inflation has stayed above his 6% territory for the second consecutive month. However, the pace of inflation has slowed over the past few months, leading to speculation that it will fall short of 7% and peak later this year.

A senior Statistical Office official said at a press conference that “the costs of restaurants, groceries and utilities are rising sharply,” and that such price increases were largely due to global inflationary pressures, with only a small Growth was offset by a rise in oil prices, which it said was large enough to justify the fall.

By commodities, the prices of the 144 most purchased staples increased by 7.9% year-on-year, while the prices of fruit, fish and other weather-sensitive staples increased by 13% year-on-year.

Inflation thus rose 6.8% in July, the highest level since November 1998 during the Asian financial crisis.
Consumer prices rose by 7.2% in October 1998, and combined with the rise in November of the same year, inflation exceeded 6% for the second consecutive month.

Meanwhile, data on Tuesday showed inflation slowing on a monthly basis, to 0.3% from June to July, 0.6% from May to June, and 0.6% from April to May. , down from 0.7% between March and 0.7%. April.

Under these circumstances, the Statistical Office’s consumer price outlook may fall short of the 7% that some fear.
In separate data, the Bank of Korea (BOK) said inflation on Tuesday would remain in the 6% range “for now”.
BOK did not say whether inflation will rise further, in contrast to last month’s briefing which hinted that consumer price growth could reach his 7%.

Hyundai Research Institute Deputy Director Joo Won sees the slowdown in oil prices as a sign that inflation peaked in July or could peak in August.

He noted that the price of South Korea’s benchmark Dubai crude is just above $100 a barrel after he hovered around $120 a barrel in June.

Meanwhile, the average price of gasoline in South Korea has dropped to 1,800 won ($1.30) per liter after rising to the 2,000 won level in recent months.

Deputy Prime Minister and Minister of Economy and Finance Ju Kyung-ho recently said inflation could peak in October unless external inflation risks worsen.

Risks include the possibility of a recovery or surge in oil prices due to the ongoing civil war in Ukraine and supply chain shortages.

Credit/Source : KoreaTimes