Seoul: South Korea's consumer prices have surged more than 3 percent from a year earlier for two consecutive months as of June, reflecting the ongoing impact of the Middle East conflict on supply chains and oil prices, data revealed on Thursday. This increase marks the steepest climb since December 2023, when the rates were similarly elevated.
According to Yonhap News Agency, consumer prices, a vital measure of inflation, rose 3.2 percent last month compared to the previous year, based on data from the Ministry of Data and Statistics. This surge was largely fueled by a 4.4 percent rise in industrial product prices, driven by escalating fuel costs. The ministry reported a significant 24.7 percent jump in fuel prices, contributing nearly a full percentage point to the overall rise in consumer prices, the sharpest growth since July 2022.
In further detail, gasoline prices increased by 23.1 percent, while diesel prices saw a spike of 33.7 percent. South Korea's heavy reliance on energy imports exacerbates these conditions. Additionally, agricultural and fishery products experienced a 3.2 percent price rise, with domestic beef and rice prices climbing 7.5 percent and 11.7 percent, respectively. A notable increase was seen in the price of green onions, which soared 37.1 percent due to reduced cultivation areas and adverse weather impacts.
Service prices also rose 2.6 percent from the previous year, with public and private sector services advancing by 1.6 percent and 3.4 percent, respectively. Excluding dining-out services, the private sector's increase was 3.9 percent. International flight ticket prices experienced a significant 28.2 percent hike. Core inflation, excluding volatile food and energy prices, rose by 2.5 percent over the past year.
The Ministry of Finance and Economy attributed the containment of consumer price growth to 3.2 percent to the government's fuel price cap system implemented in March. Without this measure, inflation could have reached 3.6 percent. The central bank anticipates a potential easing of consumer price growth in July, citing government efforts to curb inflation. However, they caution that while global oil prices may decline, the improving economy could exert upward pressure, keeping inflation elevated.
Lee Ji-ho, deputy governor of the Bank of Korea, emphasized the need for continued monitoring of consumer price trends, particularly due to the high cost-of-living burden on vulnerable groups. First Vice Finance Minister Lee Hyoung-il underscored the importance of maintaining inflation around 3 percent in the latter half of 2026. To address inflation, South Korea has announced plans to initiate discount events at local retail stores and increase egg imports in July and August.
"Related ministries will bolster on-site inspections so that all measures will contribute to the stabilization of consumer prices," Lee added.