Seoul: South Korea’s consumer prices grew 5.1 per cent on-year in 2022, accelerating from a 2.5 per cent gain in 2021, marking the steepest on-year rise since 1998, when consumer inflation spiked 7.5 per cent in the wake of the Asian financial crisis, government data showed Friday.
According to the data compiled by Statistics Korea, the 2022 reading came in line with the government’s previous estimate, reports Yonhap news Agency.
South Korea has been grappling with inflation following a sharp rise in energy and raw material prices amid the Russia-Ukraine war.
The price of utility services gained 12.6 per cent on-year in 2022, as South Korea, which depends heavily on imports for its energy needs, was hit by soaring global prices of key resources.
It marked a drastic turnaround from a 2.1 per cent on-year decline posted in 2021.
The price of agricultural, fisheries and livestock products increased 3.8 per cent in 2022, slowing from an 8.7 per cent spike tallied a year earlier.
Industrial product prices, however, increased 6.9 per cent on-year in 2022, with those of oil and processed foodstuffs rising 22.2 per cent and 7.8 per cent, respectively, the data also showed.
Prices of services increased 3.7 per cent this year, compared with a 2 per cent growth posted in 2021. The rise was led by higher insurance fees, rents, and dining-out costs.
Core inflation, which excludes volatile agricultural products and oil prices, rose 4.1 per cent in 2022, rising sharply from 1.8 per cent growth tallied last year.
Prices of daily necessities — 144 items closely related to people’s everyday lives, such as food, clothing, and housing — jumped 6 per cent on-year in 2022.
In December, consumer prices grew 5 per cent from a year earlier. Inflation rose more than 5 per cent for the eighth month in a row.
Consumer prices earlier increased at the fastest pace in almost 24 years at 6.3 per cent in July.
The figure stayed above 2 per cent — the central bank’s inflation target over the medium term — for the 21st straight month in November.
As for December, the prices of agricultural, fisheries, and livestock products edged up 0.3 per cent on-year. Those of industrial products advanced 6.1 per cent, higher than the previous month’s 5.9 per cent increase.
Those of electricity, gas and water, meanwhile, shot up 23.2 per cent. Prices of services advanced 4 per cent, lower than a 4.1 per cent on-year rise posted in November.
The Bank of Korea (BOK) said that the December inflation figure was within its prediction made in November, adding that price growth will likely stay at around 5 per cent until early next year.
To tame inflation, the BOK has hiked its benchmark interest rate by a combined 2.75 percentage points since August last year. The current rate stands at 3.25 per cent.
The Finance Ministry earlier estimated next year’s inflation at 3.5 per cent.
–IANS
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