Korea - shoppers worry about surging food prices amid drought and AI outbreak: ARIRANG NEWS

ARIRANG NEWS

Published on 4 Jul 2017

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Consumer prices continue to rise in June.
The trend is largely driven by surging food prices on the back of a prolonged drought and an avian influenza outbreak.

Oh Soo-young looks beyond the digits. Korea's consumer prices in June rose one-point-nine percent from the year before, according to data from Statistics Korea.

Much of the inflation was attributed to spiking fresh food prices in the wake of a recent drought and an Avian Influenza outbreak.

The price of eggs alone have jumped almost 70 percent on-year. "Take this box of eggs for example. It costs 7 U.S. dollars. This time last year,... you could have bought almost twice as many eggs for the same price."

Prices for agricultural, livestock and seafood increased seven-point-six percent,... while industrial products and services, which include rental and insurance fees,... rose zero-point-nine percent and one-point-nine percent respectively.

Energy costs fell one-point-six percent,... due to a sharp drop in electricity prices. 

Core inflation, which excludes volatile food and energy costs,.. rose by a more modest one-point-four percent... compared to the overall growth in CPI.

But with sky-high grocery prices,.. the average consumer is feeling a pinch in their wallets. "Eggs, tofu, vegetables are all staple foods for the average citizen and it's very worrying that the prices keep going up." "I've noticed the prices of food and amenities keep getting higher, so I'm being forced to cut down on other expenditures."

Experts worry that consumers may react by tightening their purse strings,... further worsening the country's low consumption rate.

Recent data shows consumer sentiment in June-- or confidence in the Korean economy-- surged to a six-year high.

However,... experts say this is largely due to a base effect and expectations of new policies from the Moon Jae-in administration. "Lingering uncertainties such as the impact of U.S. interest rate hikes, the high ratio of household debt and the employment situation in the country is likely to continue to put a damper on spending."

The expert said we need to wait and see whether there'll be a significant recovery in consumption,... but if the government's supplementary budget proposal to create 110-thousand jobs is passed, bolstering income and employment stability,... this could provide a much needed boost to the domestic economy.

Oh Soo-young, Arirang News.