Consumption
Statistics Korea announced on Sept. 1 that the consumer price index (CPI) increased by 0.7 percent from a year ago, and 0.2 percent compared to the previous month, in July this year.
The CPI increase remained below 1 percent for the ninth consecutive month. According to the Korean government, this is attributable more to supply-side factors such as a drop in international oil prices and a slower increase in the prices of agricultural crops than to demand-side factors like sluggish consumption. “The oil price dropped by 18.2 percent year-on-year to pull down the index by 0.93 percentage points,” the Ministry of Strategy and Finance explained.
In the meantime, the core inflation rate, from which items with a high level of price volatility such as oil and farm produce are excluded, rose by 2.1 percent from a year ago to remain over 2 percent for eight months in a row. Such an increase was led by the prices of agricultural, livestock, and fisheries products that jumped by 3.4 percent. Pork and domestic beef prices gained 7.5 percent each, too.
Meanwhile, electricity, water, and gas bills dropped 11.3 percent, to lower the overall index by 0.58 percentage points. City gas and electricity charges declined 20.2 and 6.7 percent, respectively. Service prices went up by 2 percent.