Gas prices at filling stations across the country fell for an 11th consecutive week. According to Opinet, the Korea National Oil Corporation's fuel price information system, the average retail price of gasoline at stations nationwide during the fifth week of July (July 26–30) was 1,869.1 won per liter, down 3.3 won from the previous week. A gas station in Seoul is seen on Sunday. [Yonhap]
Gas prices at filling stations across the country fell for an 11th consecutive week. According to Opinet, the Korea National Oil Corporation's fuel price information system, the average retail price of gasoline at stations nationwide during the fifth week of July (July 26–30) was 1,869.1 won per liter, down 3.3 won from the previous week. A gas station in Seoul is seen on Sunday. [Yonhap]

South Korea's consumer price inflation returned to the 2 percent range for the first time in three months in July, helped by stabilizing international oil prices, the government's petroleum price cap and easing farm prices. After two consecutive months above 3 percent driven by the fallout from the Middle East war, headline inflation pulled back — though core inflation climbed to its highest level since December 2023.

The consumer price index stood at 119.77 (base year 2020=100) in July, up 2.8 percent from a year earlier, according to data the Ministry of Statistics released Tuesday. Monthly consumer price inflation had held at 2.0 percent in January and February and 2.2 percent in March before accelerating to 2.6 percent in April, 3.1 percent in May and 3.2 percent in June amid the fallout from the Middle East war.

Industrial goods prices rose 3.7 percent from a year earlier. Petroleum product prices climbed 15.5 percent, remaining elevated but well below June's 24.7 percent gain. Diesel rose 21.5 percent, gasoline 12.6 percent and kerosene 20.5 percent, all posting double-digit increases. The Ministry of Economy and Finance estimated that the petroleum price cap shaved about 0.3 percentage points off last month's consumer price inflation.

Prices for agricultural, livestock and fishery products rose 0.9 percent year on year, a sharp slowdown from June's 3.2 percent gain. Their contribution to overall inflation narrowed from 0.24 percentage points to 0.07 percentage points. Farm product prices fell 2.2 percent, pulled down by lower vegetable prices — cabbage dropped 18.4 percent, watermelon 11.1 percent, spinach 21.3 percent, cucumber 13.8 percent, zucchini 15.9 percent and radish 10.8 percent. Domestic beef (up 5.7 percent), imported beef (8.7 percent), rice (7.9 percent), eggs (7.5 percent), mackerel (7.0 percent) and green onions (18.3 percent) continued to post strong gains.

Durable goods inflation accelerated to 3.9 percent, widening from the previous month. Computers surged 25.1 percent and portable multimedia devices 22.5 percent, driven in part by rising semiconductor prices, while electric vehicle prices climbed 6.2 percent.

In services, personal service prices rose 3.5 percent, also accelerating from the prior month. Overseas group travel costs jumped 20.0 percent, international airfares 21.7 percent, insurance service fees 13.4 percent and auto repair costs 6.1 percent. Dining-out prices rose 2.6 percent, while personal services excluding dining out climbed 4.1 percent.

The lifestyle price index rose 2.5 percent from a year earlier, while the fresh food index fell 2.3 percent. The OECD-standard core inflation measure — the index excluding food and energy — rose 2.6 percent, its highest reading since December 2023, when it stood at 2.8 percent. South Korea's domestic core inflation gauge, which excludes farm products and petroleum, also rose 2.5 percent.

Deputy Finance Minister Lee Hyeong-il, who chaired a ministerial meeting on prices Tuesday, urged all government agencies to make every effort to minimize upward pressure and ease the burden on households. "Upside risks to prices remain, including uncertainty surrounding the Middle East war, a base effect from last year's temporary telecom discount, the impact of extreme heat and other abnormal weather, and food prices," he said.

The government projected that a base effect from the one-month mobile phone bill discount SK Telecom offered last August following a hacking incident would push up the mobile phone fee component of consumer prices by about 0.8 percentage points in August.

The government added that it plans to announce a "chuseok" (Korean autumn harvest holiday) livelihood stabilization package in September, covering measures to stabilize prices of key seasonal goods and ease the burden on vulnerable households ahead of the holiday.


fact0514@heraldcorp.com