S. Korea's Consumer Prices Increase 2 Percent for 6th Straight Month

(MENAFN) South Korea's consumer prices remained persistently elevated for a sixth straight month in February, with Lunar New Year holiday spending driving private service costs to their fastest pace in over a year, data from the Ministry of Data and Statistics showed Friday.

The consumer price index (CPI) held steady at 2.0 percent year-on-year in February, matching January's reading, the ministry confirmed. Headline inflation has remained at or above the Bank of Korea's mid-term target of 2 percent every month since September 2025 — registering 2.1 percent that month before climbing to 2.4 percent in both October and November, then easing slightly to 2.3 percent in December.

Food Prices: A Mixed Picture
Prices for agricultural, livestock, and fishery products rose 1.7 percent annually in February, cooling from a 2.6 percent gain the prior month. Agricultural prices slipped 1.4 percent on improved supply, though livestock and fishery prices climbed 6.0 percent and 4.4 percent respectively.

Rice prices spiked 17.7 percent, while tangerines, napa cabbage, white radish, pears, carrots, and onions all recorded double-digit price declines. Pork, beef, eggs, and mackerel each posted single-digit gains.

Energy and Industrial Goods Ease
Industrial product prices — spanning oil and processed food — rose 1.2 percent in February year-on-year, decelerating from 1.7 percent growth the previous month. Oil products fell 2.4 percent annually, their first decline in six months, as cheaper crude weighed on costs. Gasoline, diesel, and liquified petroleum gas (LPG) prices each retreated in single digits.

Processed food prices expanded 2.1 percent — down from 2.8 percent in January and the softest reading since December 2024 — as an anti-trust watchdog's investigation into price-fixing of daily necessities curbed gains.

Electricity, natural gas, and tap water charges edged up a combined 0.2 percent annually. City gas, heating, and waterworks fees all rose in single digits, while electricity bills dipped 0.4 percent.

Services Surge on Holiday Effect
Service prices advanced 2.6 percent last month, contributing 1.44 percentage points to overall headline inflation. Public service prices grew 1.6 percent, while private service prices — including dining — surged 3.5 percent, the sharpest acceleration since January 2024, fueled by Lunar New Year-driven demand for travel and accommodation.

Car rental fees skyrocketed 37.1 percent in February — the steepest increase since records began in 1995. Dining-out costs rose 2.9 percent, and private service prices excluding eating-out climbed 3.9 percent.

Housing rent, encompassing both Jeonse and monthly lease arrangements, rose 0.9 percent year-on-year. Jeonse is South Korea's distinctive two-year residential contract under which a tenant provides a lump-sum deposit to a landlord in lieu of monthly payments.

Underlying Pressures Persist
The livelihood items index — tracking daily necessities — gained 1.8 percent annually, while the fresh food index, covering fish, shellfish, fruits, and vegetables, slid 2.7 percent.

Demand-driven inflation remained a concern. The core CPI, stripping out volatile agricultural and oil prices, rose 2.5 percent last month. The OECD-method core gauge, which also excludes energy and food, increased 2.3 percent.

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