Korea's Consumer Prices Rise 2.8% as Government Rolls Out Kimchi Discounts

In October, Korea's consumer prices increased by 2.8% compared to the previous year, remaining in the upper 2% range for the second month in a row. This rise is primarily due to higher prices for petroleum, processed food, and dining out. The National Data Agency reported that the consumer price index was 120.73 in October, up 2.8% year-on-year, and 0.2% from September.

The annual inflation rate slowed to 3.1% from 3.1% in August and 2.9% in September. Despite a sharp decline in agricultural product prices, which fell by 1.7% year-on-year, processed food and dining-out prices continued to contribute to the overall increase. By category, vegetable prices dropped by 11.2%, while agricultural product prices decreased by 7.5%.

In contrast, livestock product prices rose by 4.8%, and fishery product prices increased by 5.4%. Domestic beef and mackerel prices climbed by 9.1% and 9.3%, respectively. The domestic prices of fishery products experienced the steepest increase since January. Manufactured goods prices rose by 4.4%, driven by a 14.9% surge in petroleum prices.

The government plans to roll out a package of 64 billion won (approximately $47.82 million) measures to alleviate the food cost burden on households. This includes discounts on agricultural, livestock, and fishery products, as well as kimchi seasoning ingredients and major fishery products, with discounts of up to 50%. The government will also strengthen measures against livestock diseases and ensure stockpiles and shipments in preparation for El Niño and cold snaps.

Despite these measures, the Bank of Korea remains cautious about the price outlook, with a deputy governor expecting consumer price inflation to remain in the upper 2% range in November.