South Korea's consumer prices rise 2.9% in September, energy costs remain high
Quick Look
South Korea's consumer prices increased 2.9% year-on-year in September, driven by elevated energy prices amid Middle East tensions, while agricultural goods declined due to government discount programs and supply expansion; core inflation also rose to 2.8%.
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Why It Matters
South Korea's consumer price growth had been at 2.8% in July and 3.1% in August before rising to 2.9% in September, with energy prices elevated due to Middle East tensions and agricultural prices declining due to government policies.
South Korea's consumer prices rose 2.9 percent in September from a year earlier, data showed Friday, with energy costs remaining elevated while prices of agricultural goods declined.
According to data from the Ministry of Data and Statistics, consumer price growth returned to 2 percent levels in September.
The consumer price increase came to 2.8 percent in July and 3.1 percent in August.
The latest report was released at a time when prices of petroleum products remained elevated amid the prolonged geopolitical tension in the Middle East, rising 14.8 percent on-year in September.
In detail, diesel prices rose sharply by 20 percent, and gasoline prices shot up 11.8 percent.
South Korea relies heavily on imports to meet its energy needs.
The government, meanwhile, said the fuel price cap currently in place is estimated to have limited the overall increase in consumer prices by 0.6 percentage point.
The report showed that prices of overall industrial products rose 4.2 percent from a year earlier in September.
Prices of agricultural, livestock and fishery products, on the other hand, fell 0.3 percent, led by lower prices of napa cabbage and apples, which dropped 9.2 percent and 15.2 percent, respectively.
The report showed that prices of domestically produced beef and pumpkins rose by 6.6 percent and 46.9 percent, respectively.
"Prices of agricultural products faced upward pressure in September, as the Chuseok holiday fell in October last year. But prices fell on-year for two straight months on the back of the government's discount programs and supply expansion," the finance ministry said in a separate report.
Prices of agricultural, livestock and fishery products backtracked 2.6 percent on-year in August.
Prices in the service sector rose 2.7 percent, led by higher insurance premiums and overseas package tour prices, which increased 13.4 percent and 19.3 percent, respectively.
Prices of electricity, gas and water rose 0.4 percent over the period.
Core inflation, which excludes volatile food and energy prices, also advanced 2.8 percent on-year in September.
Open Questions
- How long will the fuel price cap remain in effect?
- What specific supply expansion measures were implemented for agricultural goods?
- Will core inflation continue to rise if energy prices remain elevated?
