Annual Inflation Rate 3.6%... Electricity and City Gas Prices Up 20%

Statistics Korea announced on the 29th that the Consumer Price Index (CPI) in 2023 rose by 3.6% compared to the previous year. Although this is a decrease from the 5.1% increase last year, it still represents a continuation of high inflation in the mid-3% range annually.

By category, agricultural, livestock, and fishery products as well as electricity, gas, and water prices increased, while diesel and gasoline prices notably decreased.

Agricultural, livestock, and fishery products saw an overall increase of 3.1%, with livestock products falling by 2.2%, but agricultural products rising by 6.0% and fishery products by 5.4%. Industrial products experienced a 2.6% overall increase, as petroleum products fell by 11.1%, but processed foods (6.8%), textile products (6.7%), durable goods (2.8%), and other industrial products (4.1%) rose.

Electricity, gas, and water prices rose by 20.0% due to increases in electricity and city gas rates.

Looking more closely at individual items within agricultural, livestock, and fishery products, apples rose by 24.2%, tangerines by 19.1%, mackerel by 9.7%, chicken by 11.8%, strawberries by 11.1%, and green onions by 18.1%.

Among industrial products, bread increased by 9.5%, T-shirts by 11.4%, mobile phones by 3.7%, milk by 9.9%, and coffee by 12.6%, while diesel fell by 15.2%, gasoline by 9.3%, and automotive LPG by 11.7%.

Electricity rates rose by 22.6%, city gas by 21.7%, district heating fees by 27.3%, and water supply charges by 3.9%.

Overall, the CPI excluding food and energy rose by 3.4% compared to the previous year, and the CPI excluding agricultural products and petroleum products rose by 4.0%.

Food prices increased by 5.6% year-on-year, causing the living cost index to rise by 3.9%. The living cost index including rent rose by 3.4% compared to the previous year.

Statistics Korea highlighted that the inflation rate fell from 5.1% last year to 3.6% this year. A Statistics Korea official stated, "Petroleum products rose by 22.2% in 2022 but fell by 11.1% in 2023, which significantly contributed to the decline in the inflation rate," adding, "On the other hand, electricity, gas, and water prices increased by 20.0%, higher than the previous year."