근원물가 2%대 중반 되면, 전 품목 ‘덩달아’ 상승 뚜렷해져

Recent analysis by the Korean Bank indicates that when the base index (excluding food and energy) rises to a mid-range of 2% in the second half of the year, price increases tend to spread to various categories of goods. The base index is considered the primary indicator for determining the central bank's interest rate decision, currently at 2.6% based on July data.

Forecasts from the Bank suggest that the year-on-year increase rate for the base index will be around 2.5% for this year and next, supporting the central bank's stance on raising the interest rate. The research team, including Director General of the Bank's Research Institute, Cha Joon-suk, evaluated the impact of demand-side pressures on the base index using a report titled "The Effect of Demand-Side Pressure on Base Index in the Current Situation."

The report revealed that while supply-side pressures have gradually decreased in the second half of the year, demand-side pressures are expected to expand further due to the ongoing economic improvement and the impact of rapidly improving export prices. Throughout the past four periods where demand-driven increases in the base index occurred, they were: 2002 Q1-4 (pre-Card Crisis), 2007 Q2 (pre-global financial crisis), 2011 Q2-4 (post-financial crisis recovery), and 2022 Q1 (recovery from the COVID-19 pandemic).

The research team highlighted that when the ratio of actual GDP to potential GDP remains positive, the base index has risen above 2.5% in the second half of the year. They utilized a regression analysis technique (kernel regression) to present the trend line's slope change as a result. For individual service products, this trend is more pronounced, suggesting that when the base index exceeds 2.5%, price trends among different categories become sharply divergent, with individual product prices moving independently from others.

The research team stated that during demand-driven "high" base index periods, household consumption capacity expands, leading to increased consumption and upward pressure on prices, while the demand-side pressure becomes relatively easier to pass on to prices. Bank Director General Cha Joon-suk described the current situation as similar to the previous four instances.

He noted that cost shocks resulted in price pressure in the second half of the year, while demand pressures continue to expand. The base index rate was 2.0-2.4% in the first four months of this year but has since risen into the mid-2% range. The research team emphasized that the recent upward trend in base index rates indicates a need to closely monitor the potential spread of price increases to other categories of goods, along with the broader implications of economic recovery and improved trade conditions on overall price inflation.