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Consumer prices jump 6% y/y in June, hitting nearly 24-year high Updated: 2022-07-05 19:02:54 KST

The nation's consumer prices hit a 24 year high, rising 6 percent on-year.
Despite various measures including fuel tax cut.. it seems there's not much local policymakers can do to stabilize skyrocketing prices.
Shin Se-byuck helps us look beyond the digits.

Inflation remains unrelenting in South Korea.
Data from Statistics Korea on Tuesday shows the country's consumer prices rose at the fastest pace in almost 24 years in June soaring six percent from the same month last year.
That's the largest jump since November 1998 during the Asian financial crisis.
The June figure marks the 15th consecutive month that the index has risen by more than 2 percent, which is the central bank s inflation target over the medium term.
The rapid surge comes on the back of soaring energy, food, and raw materials prices.
By Category
livestock prices shot up 10.3 percent on-year, with imported beef rising by around 27 percent, and chicken and pork up by around 20 percent.
The cost of insurance was up almost 15 percent, rent climbed almost three percent, and the cost of dining out jumped eight percent, hitting a 30-year record.
Petroleum products also saw a sharp on-year increase in prices, rising by an average of 40 percent.
To ease the burden of high fuel prices, the government is rolling out several measures.
Despite the government's efforts to lower the burden on drivers, people are still feeling the squeeze.

"It's already been a few months since oil prices started to soar. I feel like fuel prices are at a level where we can't even feel the benefit of the tax cuts. Even if it goes down, it goes back up again the next day."

"I do feel the squeeze at the pump. It feels like diesel prices have risen much higher than they actually have. I have a long commute, but I prefer to use public transportation these days."

One expert explains that because the current inflationary pressure is mostly triggered by external, geopolitical factors such as the prolonged Ukraine crisis there isn't much that Korea can do to stabilize inflation. However, he says there's still something that the government can do to put a cap on prices.

"It can limit wage increases which can further increase prices through the wage-price spiral. And we can try to keep the expected inflation expectations of future inflation low so that when the oil prices and grain prices come back down as it eventually must then it will be easier to control the inflation when grain and oil prices come down."

Due to geopolitical uncertainties, Statistics Korea said consumer price increases are at high risk of reaching even 7 or 8 percent. and that annual inflation could exceed the 4.7 percent forecast by the Finance Ministry.

To tame mounting inflationary pressure, some experts even predict that the Bank of Korea might raise interest rates by a "big-step" of 50 basis points this month.

Shin Se-byuck, Arirang News.
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