Last month, the consumer price inflation rate recorded 1.9%. For the first time this year, the consumer price inflation rate, which had consistently maintained the low 2% range, entered the 1% range last month.
According to the 'May consumer price trends' report released by the Statistics Korea on 4th, the consumer price index last month was 116.27 (2020=100), a 1.9% increase compared to the same month last year. This is the lowest level since December of last year (1.9%). From January to April of this year, the inflation rate had recorded between 2.0% and 2.2%.
The slowdown in inflation was largely influenced by the decline in prices of agricultural products and petroleum. The price of agricultural products decreased by 4.7% compared to the same month last year, and petroleum prices fell by 2.3%. Together, they contributed to lowering the overall inflation by 0.2 percentage points (p) and 0.09%p, respectively. This is a result of favorable weather conditions leading to increased vegetable supply and the decline in international oil prices.
By item, prices of major fruits and vegetables such as apples (-11.6%), green onions (-33.4%), tomatoes (-20.6%), and cabbage (-15.7%) all fell.
On the other hand, livestock prices increased by 6.2%, raising overall inflation by 0.15%p. Prices of pork (8.4%), domestic beef (5.3%), and eggs (3.8%) rose significantly compared to the previous year. Lee Do-won, an economic statistician at the Statistics Korea, explained, "The price increase of imported pork, the decrease in the number of cattle slaughtered, and the rise in chicken prices acted together."
Service prices rose by 2.3%. In particular, personal service prices excluding dining and public utility fees increased by 3.1%, while the dining sector rose by 3.2%, pushing overall prices up by 0.62%p and 0.46%p, respectively. Although the inflation rate for dining matched that of the previous month, it is the highest level since March last year (3.4%).
Processed food prices showed a rise of 4.1%, the same as in April, maintaining the highest level since December 2023 (4.2%). Among the detailed items, the price of dried squid increased by 50.5% compared to the same month last year, displaying the largest increase. Other items such as chocolate (22.1%), seasoning sauce (17.1%), kimchi (13.2%), vinegar (12.1%), flavor seaweed (11.2%), baby food (11.1%), gochujang (10.8%), and biscuits (9.6%) also recorded nearly double-digit rises.
Core inflation remains at a high level. The index excluding food and energy, based on the Organisation for Economic Co-operation and Development (OECD) standards, rose by 2.0%, slightly easing from the previous month (2.1%), while the index excluding agricultural products and petroleum increased by 2.3%.
The fresh food index fell by 5.0% compared to last year, recording the largest drop in 3 years and 7 months since October 2021 (-7.8%). The prices of fresh food items in the grocery basket remain stable.
The living expense index, which reflects consumer sentiment regarding prices, increased by 2.3%. The living expense index consists of 144 essential items that are frequently purchased and have a high expenditure weight.
Meanwhile, the consumer price index for May was initially scheduled to be announced on June 3, but it was delayed by one day due to the impact of the temporary holiday designated on the presidential election date.