Last month, the consumer price index rose by 2.1%. Weather factors such as heatwaves and heavy rain, along with increased demand, led to price surges for some agricultural and livestock products, and apartment rents also saw a slight increase due to lending regulations.
According to the 'July Consumer Price Trends' report released by Statistics Korea on the 5th, last month's consumer price index was 116.52 (2020=100), which is a 2.1% increase compared to the same month last year. The inflation rate temporarily slowed to 1.9% in May, rebounded to 2.2% in June, and has continued to hover in the 2% range for two consecutive months.
Processed food prices rose by 4.1% compared to the previous year, reflecting impacts from increased ex-factory prices. Although this represents a slowdown from the previous month (4.6%), the rise remains considerable. It is analyzed that processed foods contributed 0.35 percentage points (p) to the overall consumer price rise.
Seafood also saw a strong increase of 7.3% compared to the previous year. External demand factors, such as the rise in kimchi exports, appear to have influenced this. The representative item, mackerel, surged by 12.6%.
Agricultural products decreased by 0.1% compared to the same month last year, though the drop was smaller than the previous month (-1.8%). Due to abnormal weather leading to reduced supply and increased demand, prices for fruits and vegetables significantly rose compared to the previous month. Watermelon prices rose by 20.7%, cabbage by 25%, lettuce by 30%, and spinach by 78.4%, with spinach also increasing by 13.6% compared to the same month last year.
The prices of fruit also fell by 3.8% compared to the previous year, showing a slowdown from the previous month's decline (-7.4%). The price increases of certain items like watermelon have been interpreted as influencing the overall trend.
Director Park Byeong-seon from the Statistics Korea Price Trends Division said, 'The shipping conditions are not favorable due to the heatwave and heavy rain, while demand has increased, leading to significant price rises for fruits like watermelon.' He noted, 'Although the year-on-year rise is low due to high prices last year, there has been a substantial increase compared to the previous month.'
Among livestock products, domestic beef prices rose by 4.9% compared to the previous month, marking an increase from 3.3%. The price of beef in the institutional sector also rose by 1.6%, higher than the 1.2% increase seen the month before. The effects of consumer coupons distributed from the 21st of last month are believed to have been partially reflected, but the government also sees the effects of decreased slaughtering and overall rises in dining prices as contributing factors.
Director Park noted, 'Since the timing of consumer coupon distribution was in the latter half of July, it is possible that this had some impact on prices, but it is difficult to analyze it distinctly.'
In terms of housing costs, the shortage of jeonse (long-term rental) listings has resulted in a 0.1% increase in jeonse prices compared to the previous month. Compared to the same month last year, prices rose by 0.5%. Monthly rents also increased by the same rate (0.1%) compared to the previous month and rose by 1.1% year-on-year. The government analyzed that the balance of supply and demand in the jeonse market has been disrupted following the lending regulations implemented on June 27.
Prices for petroleum products fell by 1.0% compared to the previous year, returning to a downward trend after a brief rise in June (0.3%).
Prices for public services rose by 1.4% compared to the previous year, influenced by increases in subway fares in the metropolitan area. This marks a slight increase compared to the previous month (1.2%).
Core inflation, which shows the underlying trend of prices excluding food and energy, rose by 2.0% compared to the previous year, maintaining the same level as the previous month according to the OECD standard. The index excluding agricultural products and petroleum products increased by 2.3%.
The living cost index, which reflects the perceived cost of living, rose by 2.5%, maintaining the same level as the previous month.