Korean Consumer Price Inflation Hits World Record

Consumer prices in Korea have increased the greatest among the world’s major countries this year. According to the Bank of Korea on Monday, consumer price inflation in Korea marked 3.3 percent in the first quarter (January to March) and has reached the highest among leading countries including the U.S., Japan, the E.U., China, Taiwan, and others.

Consumer price inflation in U.S. marked 1.8 percent in the first quarter, a big decrease from last year’s 2.9 percent.

Even the consumer prices of China, with a distinctively high economic growth rate, stood at 2.8 percent while consumer prices of Japan in January dropped 0.3 percent from last year’s and has remained stagnant in February.

Consumer prices in slightly rose by 0.5 percent in Taiwan, while prices rose by 1.9 percent and 1.4 percent in Singapore in January and February respectively.

Average consumer price inflation of 15 E.U. nations in the first quarter dropped by 0.5 percent to 1.7 percent from last year’s 2.2 percent. The consumer price of each nation including U.K. (1.3 percent), Germany (2.0 percent), France (2.0 percent), Italy (2.3 percent) and others are low compared to Korea.

The Bank of Korea explained, “It is wrong to simply compare the consumer prices of Korea to developed countries which have stable low growth rates and to China which has abundant cheap labor,” and continued, “Consumer price inflation in Korea is high because Korea is highly dependent on overseas in raw material and thus, is much influenced by a rise in international oil price and others.”

Joong-Hyun Park sanjuck@donga.com