Annual Consumer Price Trends Reveal Significant Increases

Statistics Korea released the 'December 2024 and Annual Consumer Price Trends' report on Dec. 31, indicating a 2.3% rise in the annual consumer price index (CPI) compared to the previous year, with 2020 as the base year. This represents the lowest level in four years since 2020, yet it surpasses the 2.0% price stability target.

Agricultural Product Prices Skyrocket

Agricultural product prices have seen a significant increase this year due to poor harvests and the impact of summer heatwaves and heavy rains. The agricultural prices rose by 10.4%, the highest growth rate in 14 years. Specific items like tangerines, apples, pears, and cabbages have seen dramatic price increases.

Fresh Food Index Hits Record High

The fresh food index, primarily driven by fruits and vegetables, jumped by 9.8% from last year, reaching its highest point since 2010. Fresh fruit and vegetable prices have risen sharply, with fresh fruit prices experiencing the steepest growth in 20 years.

Other Categories Show Slower Price Increases

Other categories such as services, electricity, gas, and water experienced slower price increases compared to last year, contributing to the lower overall inflation rate. The core inflation index, excluding food and energy prices, rose by 2.2%.

Future Inflation Expectations

Kim Woong, deputy governor of the Bank of Korea, commented on the potential for slight inflation increases next month due to high exchange rates. However, he predicts stabilization below the 2% level for some time, influenced by base effects in oil and agricultural prices and weak demand pressure.