SEOUL, Dec 31 (NNN-YONHAP) – South Korea’s headline inflation hit the highest in 24 years this year, due to higher global energy prices, statistical office data showed, yesterday.
The consumer price index (CPI) stood at 107.71 in 2022, up 5.1 percent from the previous year, according to Statistics Korea. It was the highest in 24 years since 1998.
The consumer price inflation stayed below one percent with 0.4 percent in 2019 and 0.5 percent in 2020, before rising to 2.5 percent in 2021, on the back of expensive raw materials and pent-up demand.
The headline inflation topped the Bank of Korea (BOK)’s mid-term target of two percent for the second straight year.
To counter the high inflation, the BOK began to hike its benchmark interest rate in Aug last year, raising the rate from a record low of 0.50 percent to 3.25 percent.
Expectations ran high for the BOK’s further rate hikes as the U.S. Federal Reserve lifted its key rate by 0.50 percentage points to a range of 4.25-4.50 percent.
This year’s high inflation was driven by higher energy costs, stemming from geopolitical risks in Europe.
Price for industrial products, including oil products, increased 6.9 percent this year. Oil products price jumped 22.2 percent, marking the highest in 24 years.
Processed food price climbed 7.8 percent in 2022, from a year earlier.
Price for electricity, natural gas and tap water, spiked 12.6 percent this year, logging the highest since relevant data began to be compiled in 2010.
Price for agricultural, livestock and fishery products added 3.8 percent in 2022, after gaining 8.7 percent in the previous year.
Pent-up demand, caused by the lifting of all the anti-COVID-19 measures, except an indoor mask mandate, boosted services prices, especially dining-out costs.
Private services price, including dining-out costs, picked up 5.4 percent this year, recording the highest since 1996. Public services price rose 0.8 percent.
Expense for dining out soared 7.7 percent this year, marking the highest in 30 years since 1992.
The livelihood items index, which gauges price for daily necessities, surged 6.0 percent in 2022, the highest since 1998.
Core consumer price, which excludes volatile agricultural and oil products, advanced 4.1 percent this year, while the OECD-method core price, excluding volatile energy and food costs, added 3.6 percent.
In Dec, the consumer price increased 5.0 percent on a yearly basis, hovering above 5.0 percent for the eighth consecutive month.
After peaking at 6.3 percent in July, the consumer price inflation slowed down to 5.7 percent in Aug, 5.6 percent in Sept, 5.7 percent in Oct, and 5.0 percent in Nov.– NNN-YONHAP
