October Consumer Price Trends
Consumer Prices Up 0.1%
Core Inflation Down 0.3%... Lowest in 20 Years and 11 Months
"One-Time Communication Fee Support... No Impact on November Inflation"
On the 12th, when the government eased social distancing to Level 1, office workers were moving for lunch in Myeongdong, Seoul. / Photo by Mun Ho-nam munonam@
[Asia Economy Reporter Joo Sang-don] Last month, core inflation fell by 0.3%, marking the lowest level in about 21 years. The consumer price inflation rate returned to the 0% range. Meanwhile, jeonse prices surged sharply due to the recent jeonse crisis.
According to the consumer price trends for October recently announced by Statistics Korea, the consumer price index stood at 105.61 (2015=100), rising 0.1% compared to the same month last year. This is a 0.9 percentage point drop from the previous month's 1.0%, returning to a 0% range inflation rate.
The core inflation index, which excludes food and energy items based on the Organization for Economic Cooperation and Development (OECD) standards and covers 317 items, fell by 0.3% compared to the same month last year. This is the lowest level in 20 years and 11 months since November 1999 (-0.1%).
The living cost index, composed of 141 items with high purchase frequency and expenditure weight among a total of 460 items, decreased by 0.7% compared to the same month last year. However, food prices within this category rose by 4.7% year-on-year. In particular, the fresh food index jumped 19.9% compared to one year ago. Although the increase rate slowed compared to September (21.5%), it still shows a sharp rise. Fresh vegetables and fresh fruits rose by 20.3% and 28.9% respectively compared to the same month last year. Fresh fish and shellfish increased by 6.3%.
Despite the overall low inflation environment, housing cost burdens increased. Rent rose by 0.5%, the highest level since August 2018 (0.5%). Specifically, jeonse prices increased by 0.6%, marking the largest rise in 20 months since February last year (0.6%). Monthly rent also rose by 0.3% in October following September. This is the largest increase since November 2016 (0.4%).
An Hyung-jun, Economic Trend Statistics Officer at Statistics Korea, said, "(October inflation) was influenced by a 20,000 KRW support for communication fees, which lowered mobile phone charges," adding, "Since the communication fee support is a one-time measure, the inflation-lowering effect from communication fees will disappear next month, creating upward pressure on inflation."
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