SOUTH KOREA'S CONSUMER PRICES UP 2.1 PCT IN 2025, LOWEST IN FIVE YEARS

SEOUL, Dec 31 (Bernama-Yonhap) -- South Korea's inflationary pressure eased to the lowest level in five years in 2025, following the sharpest price growth in decades during the post-pandemic period, government data showed Wednesday, Yonhap News Agency reported.

Consumer prices, a key gauge of inflation, increased 2.1 per cent on-year this year, slightly above the Bank of Korea's inflation target of 2 per cent, according to the data from the Ministry of Data and Statistics.

The figure marks the lowest annual level since 0.5 per cent in 2020.

Inflation surged from 2.5 per cent in 2021 to 5.1 per cent in 2022 before moderating to 3.6 per cent in 2023 and 2.3 per cent in 2024, the data showed.

Petroleum product prices rose 2.4 per cent on-year in 2025, returning to an upward trend for the first time in three years since 2022, when prices jumped 22.2 per cent.

"Overall, international oil prices have fallen compared with a year ago, but rising exchange rates and a reduction in fuel tax cuts appear to have pushed up gasoline and diesel prices," said Lee Doo-won, a ministry official.

The Korean won has been among the world's weakest-performing currencies over the past year.

Prices of livestock products increased 4.8 per cent, while seafood prices rose 5.9 per cent.

In December, consumer prices increased 2.3 per cent from a year earlier, exceeding the central bank's target for the fourth consecutive month, largely due to rising import prices amid the weak Korean won.

Inflation stayed in the 2 per cent range in June and July before easing to 1.7 per cent in August and rebounding to 2.1 per cent the following month, remaining in the 2 per cent range thereafter.

The ministry attributed this month's inflation mainly to a sharp increase in petroleum product prices, which jumped 6.1 per cent from a year earlier in December, marking the largest on-year gain since a 6.3 per cent rise in February.

Notably, diesel prices surged 10.8 per cent, marking the biggest annual increase since January 2023, when they rose 15.5 per cent, while gasoline prices climbed 5.7 per cent, the largest rise since February, reflecting the impact of the weak local currency.

Prices of agricultural, livestock and fishery products rose 4.1 per cent on-year, adding 0.32 percentage point to overall inflation.

Imported beef prices increased 8 per cent, the sharpest rise since August of last year, while prices of mackerel, banana and kiwi also posted significant gains.

"While exchange rates played a role, overseas supply and demand conditions also contributed," Lee said.

Core inflation, which excludes volatile food and energy prices, increased 2.3 per cent on-year in December, the ministry said.

-- BERNAMA-YONHAP