"October's Inflation Surge: Understanding the Impact on Everyday Life"
In a world marked by economic volatility, consumer prices have surged by 3.8 percent in October, impacting the wallets of 20 to 40-year-old citizens and professionals alike. This increase, reported by Statistics Korea, marks the third consecutive monthly rise, primarily driven by global fluctuations in oil and agriculture markets.
For the concerned citizens and experts, it's crucial to understand the factors contributing to this inflation spike. In October, consumer prices increased by 3.8 percent year-on-year, surpassing September's 3.7 percent and August's 3.4 percent. This notable rise has been the steepest since March.
The journey of inflation in South Korea has been intriguing. It reached its peak at 6.3 percent in July, only to plunge to a low of 2.3 percent in July.
Of particular interest are the prices of agriculture, livestock, and fisheries, which skyrocketed by 7.3 percent year-on-year, a significant jump from the 3.7 percent increase just a month prior. Vegetables experienced an astonishing 13.5 percent surge, marking their most rapid growth in 29 months.
Utility services reported a 9.6 percent increase, reflecting the impact of rising global energy prices. Industrial product prices also gained, increasing by 3.5 percent year-on-year. The service sector rose by 3 percent over the same period, primarily due to higher insurance and house management costs.
The Finance Minister, Choo Kyung-ho, addressed these concerns during a ministerial meeting in Seoul. He highlighted that the slowing of domestic inflation is expected to be more gradual due to geopolitical risks in the Middle East and abnormal climate conditions affecting agricultural product prices. In response, the government has vowed to monitor the price and supply and demand of essential products, with a focus on stabilizing food prices, including key ingredients for kimchi, a beloved Korean dish, as the kimchi-making season approaches in late November.
To combat the rising costs, the government will activate a system designed to stabilize prices, prioritizing inflation control. It will inject 24.5 billion won ($18 million) to stabilize prices for 14 kimchi ingredients, including napa cabbage and radishes. Additionally, quota tariffs will be applied to eight imported fruits and ingredients, such as bananas, mangoes, and butter.
Core inflation, which excludes volatile food and energy prices, rose by 3.2 percent year-on-year in October, compared to 3.3 percent in September. The Bank of Korea predicts that inflation will remain above 3 percent through the end of this year.
In light of concerns over high household debt and external uncertainties, including global events like the Israel-Hamas war and fluctuating oil prices, the Bank of Korea decided to maintain its policy rate at 3.5 percent for the sixth consecutive month in October.
The next rate-setting meeting is scheduled to take place on November 30.
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