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By Kang Yoon-seung
SEOUL, Sept. 5 (Yonhap) — In August, South Korea experienced a higher than anticipated inflation rate due to the increasing costs of agricultural and manufactured goods, according to data released Tuesday.
Statistics Korea reported that consumer prices, a major indicator of inflation, rose 3.4 percent year-on-year, a larger increase than the 2.3 percent seen in July. This is the highest on-year rise since the 3.7 percent growth in April.
Core inflation, which excludes volatile food and energy prices, also increased 3.3 percent from the previous year, the same as in July.
“The fact that core inflation remained at the same level as the previous month indicates that consumer prices in August were affected by temporal factors, rather than representing a shift in the overall trend,” an official from the agency said.
A Statistics Korea official holds a briefing on South Korea's monthly inflation data in the central city of Sejong on Sept. 5, 2023. (Yonhap)
Utility services saw a particularly large rise, with prices climbing 21.1 percent due to higher electricity bills. Agricultural and fishery products increased 2.7 percent, with the price of rice, a staple food, increasing 7.8 percent. Industrial products rose 2.6 percent, with clothes leading the way. On the other hand, diesel and gasoline prices decreased 16.9 percent and 4.6 percent, respectively.
The service sector also grew 3.1 percent year-on-year in August, mainly due to higher insurance and house management costs.
The finance ministry stated that inflation is anticipated to stabilize after October. The ministry also noted that it will pay close attention to the prices of key products in the lead-up to the Chuseok holiday, the autumn harvest celebration, which falls in late September.
“The moderating inflation has been continuing, but the reflection of the sharp hike in global oil prices, which began in mid-July, is delayed in the current numbers,” First Vice Finance Minister Kim Byoung-hwan said during a meeting.
Last month, South Korea’s central bank held its key interest rate steady at 3.5 percent for the fifth consecutive time as it weighs a slowdown in growth against moderating inflation. However, Bank of Korea Gov. Rhee Chang-yon said the bank’s tightening mode will continue due to higher inflation, saying the door is still open for an additional rate hike.
People shop for groceries at a supermarket in Seoul on Sept. 3, 2023. (Yonhap)
colin@yna.co.kr
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