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Consumer Prices Grow Sharply in April

Posted May. 02, 2008 03:06,   


Consumer prices increased more than 4 percent in April, for the first time in 44 months.

In its report “Consumer Price Trend” released Thursday, the National Statistical Office said consumer prices have increased 4.1 percent from a year ago in April. Korea’s year-on-year consumer price growth rate exceeded the 4-percent mark for the first time since August 2004 when consumer prices grew 4.8 percent from the previous year. The rate stayed between 3.6 percent and 3.9 percent this year while recording 3.9 percent in January, 3.6 percent in February, and 3.9 percent in March.

Consumer prices soared rapidly in April since rising international prices of raw materials and cereals were reflected in domestic prices, and because service charges including private education fees and air fares have surged.

Worse, President Lee Myung-bak’s strategy to keep consumer price surge in check has failed. The so-called “MB Index,” consisting of prices of 52 necessities, increased 5.88 percent from a year ago in April, leading the overall consumer price increase. The growth rate of MB Index in April was 0.1 percentage point higher than in March.

Among the 52 items, prices of 30 items increased from March. Onion experienced the biggest monthly price increment, jumping a whopping 19 percent just in a month. Pork prices have increased 13.1 percent since consumers chose pork over chicken or duck in the wake of the bird flu outbreak. Also, other items whose prices increased a lot include kerosene (11.9 percent), mackerel (9.5 percent), Chinese cabbage (6.9 percent), garlic (3.8 percent) and bread (3.5 percent).

At a Cheong Wa Dae meeting on April 25, President Lee Myung-bak reportedly reproached secretarial staff, saying, “I heard that the peeled garlic price has surged. We should come up with measures like importing more garlic. The government has certainly announced that it would manage prices, but is not doing anything.”

Amid the economic slowdown and price hikes, it is getting harder for the government to determine whether it has to deal with first—economic growth or price stabilization. Song Tae-jeong, a senior researcher of the LG Economic Research Institute, said, “If the government sticks to economic growth, it may cause consumer prices to surge to an intolerable level.” The government will hold its third meeting to stabilize the people’s livelihood on Friday, and review how effective its measures to stabilize necessity prices are.