March Consumer Prices Up 2.2% Amid Rising Oil and Exchange Rate Pressures

Consumer prices last month recorded their highest growth rate in three months, rising 2.2%. According to the 'March Consumer Price Trends' released by the National Data Office on the 2nd, the consumer price index stood at 118.80 last month, up 2.2% year-on-year. The inflation rate, which had been maintained in the 2% range since January, increased by another 0.2 percentage points. This is the result of the twin pressures of rising international oil prices and a strengthening dollar (falling won value) impacting prices.

Petroleum product prices, which led the inflation, surged 9.9% year-on-year, pushing up overall prices by 0.39 percentage points. This is the highest figure in three years and five months, since October 2022. Diesel prices rose 17.0%, kerosene 10.5%, and gasoline 8.0%.

Conversely, agricultural product prices declined, partially buffering the rise in overall prices. Prices for vegetables plummeted by 13.5%, leading to a 5.6% decrease in overall agricultural product prices. The decline in sugar (-3.1%) and flour (-2.3%) limited the overall price increase for processed foods to 1.6%. However, prices for livestock products (6.2%) and fishery products (4.4%) continued to rise.

Amid the won-dollar exchange rate entering the 1,500 won per dollar range, the OECD has revised its inflation forecast for South Korea this year upward to 2.7%.