Seoul: South Korea's consumer prices increased by more than 2 percent for the second consecutive month in July, primarily due to higher costs of industrial goods and services, as reported by government data on Tuesday.
According to Yonhap News Agency, consumer prices, which are a key indicator of inflation, rose 2.1 percent from a year earlier last month, based on data from Statistics Korea. This increase follows a pattern where inflation had exceeded the Bank of Korea's 2 percent target for four months through April, before dipping to 1.9 percent in May and then climbing to 2.2 percent in June. The statistics agency attributed the July rise to the ongoing depreciation of the South Korean won, which escalated import prices for industrial goods, alongside a steady increase in service prices that contributed to inflationary pressures.
In the industrial goods sector, processed food products saw a significant price increase of 4.1 percent on-year, contributing 0.35 percentage points to July's overall inflation. Although agricultural product prices slightly decreased by 0.1 percent compared to the previous year, the prices of livestock and fisheries products experienced increases of 3.5 percent and 7.3 percent, respectively. Notably, mackerel prices surged 12.6 percent on-year, and in the agricultural sector, watermelon prices soared 20.7 percent, while lettuce and other vegetables saw a 30 percent increase compared to the same period last year.
Park Byung-seon, an official from the statistics agency, explained that "due to extreme heat and heavy rainfall, supply conditions were unfavorable, while demand rose sharply, leading to a significant increase in watermelon prices." He further noted that although fruit and vegetable prices were already high last year, the on-year increase this year is notably steep.
Conversely, petroleum product prices fell by 1 percent on-year, reversing the increase seen in the previous month. The service sector continued its upward trend with a 2.3 percent on-year gain. Within this sector, utility costs, including electricity and gas, rose 1.6 percent, while water charges increased by 2.7 percent. Prices for dining out jumped 3.2 percent from a year earlier, and non-dining services rose 3.5 percent. Out of the 39 items that comprise dining out prices, 38 experienced price hikes in July, with only pizza prices remaining unchanged.
Core inflation, excluding volatile food and energy prices, increased by 2 percent in July, consistent with the previous month's growth.