Jong-yeol Seo, Gounee Yang

Global Economic News

SOUTH KOREA’S consumer prices jumped 4.1% year on year in March, hitting a record high in a decade, as energy prices soared and food service prices reached the highest in almost 24 years.

According to the latest data by Statistics Korea, the country’s consumer price index rose 4.1% year on year to 106.06 in March. It was the highest in 10 years and three months since reaching 4.2% in December 2011. It was also the first time in 10 years and three months that the inflation rate has reached the 4% range.

The country’s consumer prices have remained above 3% for the sixth consecutive month, following 3.2% in October last year, 3.8% in November, 3.7% in December, 3.6% in January this year, and 3.7% in February. This is the longest streak that the inflation rate remained above 3% since the inflation rate had remained at 3% for 18 consecutive months from September 2010 to February 2012.

Personal services prices rose 4.4%, pushing up overall inflation by 1.36%age points. Among them, food service prices jumped 6.6% year on year, raising overall prices by 0.83%age points. It is a record in 23 years and 11 months since reaching 7% in April 1998.

“As oil and industrial product prices have soared significantly, inflation surged by 0.4%age points from the previous month (3.7%),” said Eo Woon-seon, a senior official at Statistics Korea. “The inflation trend will continue as the supply chain disruptions and price hikes are expected to persist.”

South Korean Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki held an inflation-related ministerial meeting and said, “The government will expand the oil tax cut from the current 20% to 30% for three months starting May. the government will ALSO temporarily provide diesel fuel subsidies to commercial vehicles, container trucks, and buses for three months.”