Seoul: South Korea's consumer prices rose by 2.2 percent in June, driven by increased costs of industrial goods, particularly processed food products, as revealed by government data on Wednesday. This increase marks a return to inflation levels that have consistently surpassed the Bank of Korea's 2 percent target for several months, despite a brief dip to 1.9 percent in May.
According to Yonhap News Agency, the June inflation rate is the steepest year-on-year increase since January, when it also stood at 2.2 percent. The rise in consumer prices is attributed to the recent depreciation of the Korean won, which has resulted in higher import prices for industrial goods. Additionally, a steady increase in service prices has contributed to the overall inflationary pressure.
Processed food products experienced a significant price hike of 4.6 percent year-on-year, the highest since November 2023, contributing 0.39 percentage point to the overall inflation in June. Notable price increases were observed in bread and coffee, which rose by 6.4 percent and 12.4 percent, respectively. Park Byung-seon, an official at Statistics Korea, noted that these increases reflect the rising costs of raw materials and the currency depreciation.
Petroleum product prices saw a modest increase of 0.3 percent, reversing the previous month's decline. This rise has been largely attributed to escalating tensions in the Middle East, which have driven up global oil prices. In the service sector, charges for electricity, gas, and water increased by 1.8 percent, 3.1 percent, and 3.1 percent, respectively. Personal services also saw price increases, with dining out and non-dining services rising by 3.1 percent and 3.5 percent year-on-year, respectively.
Conversely, prices for agricultural, livestock, and fishery products decreased by 1.8 percent year-on-year in June. However, egg prices surged by 6 percent, marking the steepest on-year increase since January 2022. Core inflation, which excludes volatile food and energy prices, rose by 2 percent in June, maintaining the same increase as the previous month.