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Consumer price growth stays in 6% range for 2nd month in July
By Yi Whan-woo
Consumer prices in Korea surged 6.3 percent in July from a year earlier, rising to almost a 24-year high by outpacing the previous record of 6 percent set in June, according to Statistics Korea.
The July gain also marks the first time in nearly 24 years for the inflation rate to stay in the 6 percent range or higher for the second consecutive month.
The pace of inflation, however, is slowing down as the months pass, prompting speculation that it may not reach 7 percent and will peak within the second half of this year.
"The costs of dining out, daily food and utilities grew sharply," a senior Statistics Korea official said during a press briefing, noting such price increases, attributed mainly to global inflationary pressure, were high enough to offset a slight slowdown in oil price growth.
By items, the prices of the 144 most frequently purchased daily goods rose 7.9 percent year-on-year, while prices of fruit, fisheries and other daily foods that are sensitive to weather increased 13 percent year-on-year.
Inflation in July accordingly rose at the fastest pace since November 1998 during the Asian financial crisis when it stood at 6.8 percent.
Consumer prices rose by 7.2 percent in October 1998, which together with the November gain of the same year brought the inflation rate higher than 6 percent for two consecutive months.
Meanwhile, Tuesday's data showed the pace of inflation is slowing down on a monthly basis, as seen from 0.3 percent between June and July, 0.6 percent between May and June, another 0.6 percent between April and May and 0.7 percent between March and April.
Under the circumstances, Statistics Korea projected consumer prices may not reach 7 percent as feared by some.
In separate data, the Bank of Korea (BOK) said Tuesday inflation will remain in the 6 percent range "for the time being."
The BOK did not mention whether inflation will climb higher, in contrast to last month's briefing when it hinted at the possibility of consumer price growth reaching the 7 percent range.
Joo Won, deputy director of the Hyundai Research Institute, viewed a slowdown in oil prices may be a sign that inflation already peaked in July or will do so in August.
He pointed out that the price of Dubai crude oil, Korea's benchmark, is slightly above $100 a barrel after hovering at around $120 a barrel in June.
In turn, the average gas price in Korea has been lowered to 1,800 won ($1.30) per liter after surging to the 2,000 won level for the past several months.
Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said recently that inflation could peak in October, under the condition that external inflationary risks do not worsen.
The risks include a possible rebound or spike in oil prices over the prolonged war in Ukraine and supply chain bottlenecks.
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