Seoul:South Korea's consumer prices increased by 2.9 percent in September compared to the previous year, driven by high energy costs despite a decline in agricultural goods prices. According to Yonhap News Agency, consumer price growth returned to the 2 percent range in September, following increases of 2.8 percent in July and 3.1 percent in August. The Ministry of Data and Statistics released the data highlighting continued elevated prices of petroleum products due to ongoing geopolitical tensions in the Middle East, with a 14.8 percent rise in petroleum prices in September. The report detailed that diesel prices surged by 20 percent, and gasoline prices increased by 11.8 percent. South Korea's dependence on energy imports was noted as a factor in these increases. Meanwhile, the government indicated that a fuel price cap has helped limit the overall rise in consumer prices by 0.6 percentage points. Industrial product prices saw a 4.2 percent increase year-on-year in September, with computer prices jumping 27.4 percent due to higher semiconductor costs, and smartphone prices rising 8.3 percent following new product launches. Conversely, prices of agricultural, livestock, and fishery products dropped by 0.3 percent, led by decreases in napa cabbage and apple prices by 9.2 percent and 15.2 percent, respectively. Lee Doo-won, a senior statistics official, attributed the decrease in fruit prices, such as apples and pears, to a good harvest and increased shipments ahead of the Chuseok holiday, along with government-led discount events. The finance ministry noted that despite upward pressure from the timing of the Chuseok holiday, agricultural product prices fell on-year for two consecutive months due to discount programs and increased supply. Service sector prices rose by 2.7 percent, driven by increased insurance premiums and overseas package tour prices, which went up by 13.4 percent and 19.3 percent, respectively. Prices for electricity, gas, and water saw a modest rise of 0.4 percent during the same period. Co re inflation, excluding volatile food and energy costs, advanced by 2.8 percent in September. The Bank of Korea anticipates consumer price growth to remain around 3 percent in October, citing rising core item prices. Service prices, including airfares and electronics, have been affected by higher chip prices. The central bank emphasized vigilance in monitoring consumer price trends amid uncertainties from the Middle East and the impact of cost shocks and demand-side pressures on core inflation.
