Seoul: South Korea's consumer prices rose 2 percent from a year earlier in February, remaining steady from the previous month and meeting the inflation target set by the Bank of Korea (BOK), as reported by government data on Friday.
According to Yonhap News Agency, this marks the smallest on-year increase since August, when the figure was 1.7 percent. It is also the second consecutive month that inflation met the BOK's 2 percent target, and the sixth straight month that the growth pace has stayed at 2 percent or above. In February, petroleum prices saw a 2.4 percent decrease on-year, marking the first drop in six months, although this figure does not account for the recent hike in oil prices triggered by the Iran crisis.
The prices of agricultural, livestock, and fishery products rose 1.7 percent, albeit at a slower pace compared to the previous month, largely due to a significant drop in vegetable prices. However, livestock product prices jumped 6 percent on-year, representing the highest growth in six months. The Ministry of Data and Statistics attributed the limited price growth of processed food products to the Fair Trade Commission's recent investigation into price-fixing allegations involving flour and sugar producers. Additionally, discount events during the Lunar New Year holiday in February contributed to the slower increase in food prices.
Service prices experienced a 2.6 percent rise, marking the sharpest on-year gain since January 2024, driven by a hike in prices of private services related to traveling and accommodation during the traditional holiday. Industrial goods prices increased by 1.2 percent, while electricity, gas, and water rates saw a modest rise of 0.2 percent. Core inflation, which excludes volatile food and energy prices, increased by 2.3 percent on-year last month.
The inflation outlook for March is pessimistic, with turmoil in the Middle East leading to higher oil prices. BOK Deputy Gov. Kim Woong noted that rising oil prices are adding upward pressure on costs, although slower gains in agricultural and livestock prices may offset some of this pressure. South Korea's dependence on energy imports makes it particularly susceptible to external price shocks, which often drive domestic inflation.
To stabilize the domestic energy market, the government has pledged a strong response to unfair market practices involving energy supply and prices, with authorities initiating intensive monitoring of potential price gouging by gas stations nationwide. As of 9 a.m., the average gasoline price in Seoul reached 1,916.5 won (approximately US$1.30) per liter, up 27.5 won from the previous day, according to data from the Korea National Oil Corp. This marks the first time since August 2022 that gasoline prices in Seoul have exceeded the 1,900 won threshold.