Consumer Prices Climbed 3.9% in January

Consumer prices last month rose almost four percent due to soaring oil and gold prices. The Korea National Statistical Office’s report “January Consumer Prices Trends” released yesterday showed that consumer inflation grew 3.9 percent from the same period last year.

The rate was the highest since September 2004, which also saw a 3.9-percent increase. The figure was three percent in October last year, 3.5 percent in November and 3.6 percent in December, thus consumer inflation has remained in the three-percent range for four consecutive months.

The consumer prices index for necessities including groceries last month jumped 5.1 percent from the same month last year, the highest since 2005.

Items that saw high inflation included oil products such as LPG (33.1 percent); light oil (23.9 percent); gasoline (16.8 percent); lamp oil (14.8 percent); gold rings (42 percent); spring onions (100.8 percent); radishes (97.2 percent); cabbages (81.3 percent); private university tuition (7.3 percent); daycare center fees (nine percent); city gas (9.7 percent); and bus fares (8.1 percent).

Leasing fees rose just 2.2 percent and monthly rents grew 1.9 percent from January last year.

The steep hike in inflation has deeply rattled the central Bank of Korea. Though the central bank wants to cut the call rate in the wake of the U.S. rate cut and signs of a domestic economic slowdown, high consumer prices are a big burden as a rate cut in Korea could fuel inflation.

The Korean government will call a meeting of economic authorities Tuesday on examining consumer prices trends in key items and stabilizing prices.

higgledy@donga.com