Stagnant Consumer Prices
The consumer price growth rate is expected to have reached a nine-month low in November to further approach 1 percent.
Statistics Korea released a report on Dec. 2 and announced that the consumer price rose by just 1 percent from a year ago in that month.
The growth rate was slightly over 1 percent earlier this year, and went up to 1.5 percent and 1.7 percent in April and the following two months before dropping to 1.6 percent in July, 1.4 percent in August, 1.1 percent in September and 1.2 percent in October. The gap with the Bank of Korea’s target at 2.5 percent to 3.5 percent is widening, too.
“This month, the rate of increase is estimated at slightly higher than 1 percent so the yearly average remains at below 2 percent,” said Son Woong-ki, who is in charge of consumer price policy at the Ministry of Strategy and Finance.
The consensus of economics experts is that the low consumer price and low growth will continue next year, with the international oil prices dropping and agricultural supply increasing. “The inflationary pressure is very weak due to the domestic demand decline,” said Lee Jun-hyup at the Hyundai Research Institute.