SEOUL - South Korea recorded an accelerated inflation rate for October, marking the third straight month of it remaining above the 3 percent mark, influenced by rising energy and agricultural product costs.
According to Yonhap News Agency, consumer prices rose 3.8 percent from a year earlier, which is a slight increase from the 3.7 percent year-on-year growth reported in September. This continued upsurge comes despite a general easing of inflationary trends observed recently. Since peaking below 4 percent in April for the first time in over a year, the inflation rate had been on a gradual decline, reaching a 25-month low of 2.3 percent in July. Nevertheless, prices have rebounded since August, driven by costly oil and agricultural items.
Core inflation, stripping out the volatile food and energy sectors, saw a year-on-year rise of 3.6 percent in October, presenting a modest deceleration from September’s 3.8 percent.
A closer examination reveals a 4.6 percent year-on-year jump in daily necessities, which encompasses 144 items essential to everyday living, marking an increase from the 4.4 percent rise seen in the prior month. Specific segments witnessed significant spikes, with the prices of agricultural, livestock, and fishery products climbing 7.3 percent in October, and vegetable costs surging 13.5 percent — the largest in nearly two and a half years.
The utility sector, affected by the global energy cost surge, reported a 9.6 percent year-on-year increase in October, reflecting South Korea’s dependency on energy imports.
Industrial goods prices were also on the rise, with a 3.5 percent increase compared to September, largely attributed to higher gasoline prices, which rose by 6.9 percent, although diesel costs dipped by 7.9 percent.
Service prices, encompassing insurance and house management fees, advanced by 3 percent year-on-year.
Addressing the inflationary concerns, Finance Minister Choo Kyung-ho cited various factors, such as geopolitical risks and abnormal weather patterns, projecting a slower than anticipated easing of inflation. He highlighted the government's commitment to price stabilization and the activation of a comprehensive response strategy across multiple ministries.
Despite these efforts, the Bank of Korea (BOK) anticipates inflationary pressures to remain above 3 percent for the rest of the year, surpassing its target of 2 percent. In response to the economic slowdown and increasing household debts, the central bank maintained its key interest rate at 3.5 percent last month, pausing after a series of seven rate hikes between April 2022 and January 2023.