Consumer prices in August increased by 3.1%, a larger rise compared to the previous month. The government attributed a 0.6 percentage point increase in the inflation rate to a base effect from last year's mobile phone bill discounts, estimating that the actual inflation rate, excluding this factor, is around 2.5%. In preparation for Chuseok, the government is enhancing measures to stabilize prices, including a 103 billion won subsidy for agricultural, livestock, and fishery products.
The Ministry of Economy and Finance held a meeting on September 2, led by Vice Minister Kang Gi-ryong, to discuss August's consumer price trends, price management plans for 19 essential items, and strategies to address economic challenges.
In August, consumer prices rose 3.1% compared to the same month last year, an increase of 0.3 percentage points from July's 2.8%. Prices for agricultural, livestock, and fishery products fell by 2.6%, marking the largest decline since November 2019, when prices dropped by 2.7%.
The primary driver of the inflation increase was identified as the base effect from last year's mobile phone bill discounts, which the government estimates raised this August's inflation rate by about 0.6 percentage points. Excluding this factor, the inflation rate for August is estimated at 2.5%.
Despite rising international oil prices, the increase in petroleum product prices has slowed. The inflation rate for petroleum products decreased from 15.5% in July to 14.2% in August. The government estimates that the price cap on oil has reduced the overall inflation rate by 0.5 percentage points, suggesting that without this measure, inflation could have reached 3.6%.
The government anticipates that the inflation rate in September will ease compared to August, but it has identified upward pressures on prices due to uncertainties in the Middle East and climate impacts.
Vice Minister Kang stated, "While we expect the inflation rate in September to be lower than in August, we must remain vigilant against upward pressures from uncertainties in the Middle East and climate factors. The government will do its utmost to minimize these pressures to alleviate the burden on citizens ahead of Chuseok. We urge all ministries to work together to ensure the swift implementation of the 'Chuseok Economic Stability Measures' announced yesterday."
To stabilize prices for Chuseok essentials, the government will invest a record 103 billion won to provide discounts of up to 40-50% on agricultural, livestock, and fishery products, and supply a record 183,000 tons of 19 essential items. Additionally, a program will refund 30% of purchases, up to 20,000 won, in gift certificates at 300 markets for agricultural and fishery products. Further measures to stabilize prices for agricultural and fishery products are also under consideration.
The government will provide 43.4 trillion won in holiday funds to small businesses and will support 480 billion won in policy financing for low-income and vulnerable groups over the next two months. Subsidies linked to fuel prices for CNG, diesel, and tax-exempt fuel for farmers and fishermen will also be extended until the end of the year.
Additionally, the government has activated a 'Joint Response Team for Economic Disruption' to address issues such as collusion, monopolistic practices, and consumer deception that threaten economic stability. Investigations and sanctions will be pursued across various sectors, including essential goods, services, education, and energy.
* This article has been translated by AI.
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