1 in 2 ‘high price burden’ simplified Chuseok food… When is the inflation rate?

As the recent high price situation continues, the burden on ordinary people has increased, and one out of two adults has simplified and prepared Chuseok food this year. There is an observation that prices will calm down after Chuseok, but there is still a possibility of worsening due to external variables, and the high price level is expected to continue for a considerable period of time.

According to a survey conducted by Incruit on the 10th of 1,030 members to find out the plan for this year’s Chuseok celebration and the level of economic burden, 54.2% of the respondents answered that they would prepare food for Chuseok in a simplified manner. 17.4% of the respondents said they would not do it at all, and 28.4% said they would do it like usual.

Citizens buy Chuseok food at Tongin Market in Jongno-gu, Seoul on the 8th. yunhap news

When asked why they said they would or would not simplify the Chuseok food, 85.8% answered that ‘the recently soaring prices are a burden’. The survey was conducted over two days, from the 30th of last month to the 1st of this month.

Recently, prices have risen sharply compared to a year ago, and the burden on the common people continues. According to the National Statistical Office, the consumer price index rose 5.7 percent in the same month last month due to the fall in international oil prices, and the rise fell below 6 percent. The price index of fresh foods such as vegetables, fruits, and fish, which are essential for Chuseok food, rose 14.9%, and vegetables in particular surged 27.9%.

After rising 3.7% year-on-year in February, the consumer price inflation rate continued to rise to 4.1% in March, 4.8% in April, and 5.4% in May. In June and July, they rose by 6.0% and 6.3%, respectively, the highest level since November 1998 (6.8%) during the financial crisis.

◆Deputy Prime Minister of Economy “Inflation stabilization in September at the earliest and October at the latest”… Existence of external variables, etc.

Earlier, inside and outside the government, there had been raised expectations that the inflation rate would peak around Chuseok. In the fourth quarter of last year, the consumer price inflation rate was in the mid 3% range, creating a negative base effect, and the recent stabilization of international oil prices is expected.

Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho visits Jochiwon Traditional Market in Sejong City on the 8th to check price trends and purchase fruits. news

Choo Kyung-ho, Deputy Prime Minister of Economy and Minister of Strategy and Finance, said, “I think that inflation will stabilize downwards at the earliest in September or at the latest in October,” and “Of course, it will be maintained at a high level for a considerable period of time.” “He said. Deputy Prime Minister Choo said, “There are uncertainties in gas prices and oil prices due to the development of the Russian and Ukraine crisis. We look forward to it,” he added.

However, in the case of consumer price increase this month, there is still a possibility that the increase in demand during the holiday season and the damage caused by typhoon Hinnamno will have an impact. One of the risk factors is the won-dollar exchange rate, which continues to be at a high level. When the exchange rate rises, the price of imports rises, which in turn encourages domestic prices such as oil prices, which can delay the peak of inflation. Another factor that increases the cost burden of ordinary people is that public utilities such as electricity and gas are expected to rise one after another. Electricity and gas rates, which were raised twice this year, will be raised again in October.

The BOK said, “The high inflation rate that greatly exceeds the target level will continue”

Even if the price peak is passed, the high level of inflation is expected to continue for some time.

The Bank of Korea believes that it is necessary to continue raising interest rates as high inflation is expected to continue for the time being. In the ‘Monetary and Credit Policy Report’ submitted to the National Assembly on the 8th, the BOK said, “The downward risk of the domestic economy is increasing and high uncertainty in internal and external conditions exists. We need to continue raising the trend,” he said.

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Regarding the recent price situation, the BOK observes, “Considering the oil price forecast and base effect, the inflation rate is expected to peak in the second half of this year, but there is still a possibility that the peak will be delayed or the high inflation situation will continue because the upside risk is not small.” did. The BOK explained that the surge in international raw material prices and supply disruptions, which had led to high inflation, have eased somewhat, but if the geopolitical risk-related situation worsens, there is still a possibility that the supply price pressure will increase again, the BOK explained.

The BOK also predicted that the recovery of private consumption, the strengthening of the dollar due to U.S. monetary policy tightening, and the interaction between prices and wages due to the expected inflation rate exceeding 4% would also put additional upward pressure on domestic prices.

Reporter Lee Kang-jin [email protected]

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