September Prices Up 5.6%... Increase Rate Slows for Second Consecutive Month (Update)

[Asia Economy Sejong=Reporter Son Seon-hee] The consumer price inflation rate has slowed down for two consecutive months recently. As the steep rise in international oil prices has eased, inflation appears to be pausing.

According to the 'September Consumer Price Trends' released by Statistics Korea on the 5th, the consumer price index last month was 108.93 (2020=100), up 5.6% compared to the same month last year. The inflation rate decreased for two consecutive months following 6.3% in July and 5.7% in August.

Oh Woon-seon, Director of Economic Trend Statistics at Statistics Korea, said, "The slowdown in the price increases of petroleum products and agricultural products such as vegetables and fruits resulted in a 0.1 percentage point reduction in the inflation rate."

The inflation rate for petroleum products peaked at 39.6% in June and has slowed for three consecutive months: 35.1% in July, 19.7% in August, and 16.6% in September.

However, the core inflation rate (excluding agricultural products and petroleum products), which shows the underlying trend of inflation, recorded 4.5%, an increase from 4.4% the previous month. The index excluding food and energy also rose 4.1%, up from 4.0% the previous month. Excluding petroleum products, which are a major external factor affecting inflation, the inflation trend continues.

By item, agricultural, livestock, and fishery products rose 6.2% compared to a year ago, with vegetable prices increasing by 22.1%. Industrial products, including processed foods and petroleum products, rose 6.7%. Electricity, gas, and water prices increased by 14.6%, slightly slowing compared to 15.7% the previous month. However, since electricity and gas rates are scheduled to increase this month, the trend is expected to rise again in October.

Personal services rose 6.4%, the highest level since April 1998 (6.6%). In particular, dining-out prices increased by 9.0%, marking the largest rise in about 30 years since July 1992 (9.0%).

Director Oh said, "The most significant factor slowing the steep rise in inflation is the slowdown in petroleum product prices," adding, "We need to watch closely as OPEC Plus has announced production cuts starting in October."