Seoul, March 6, 2025 – South Korea’s consumer price index (CPI) for February rose by 2% year-on-year, according to data released by Statistics Korea on March 6th. The figure, which reached 116.08, marks the second consecutive month with inflation above the 2% threshold, signaling a degree of stability within the government’s target range.
While the overall inflation rate appears controlled, a deeper dive reveals persistent upward pressure on food-related expenses. Dining out costs surged by 3%, contributing 0.43 percentage points to the overall CPI increase. Personal services, excluding dining, also saw a significant rise of 2.9%, adding another 0.57 percentage points to the overall inflation.
Petroleum products (6.3%) and processed foods (2.9%) each contributed 0.24 percentage points to the overall inflation. Notably, the increase in processed food prices represents the highest jump since January 2024 (3.2%), raising concerns about the affordability of everyday grocery items.
Despite the upward pressure on dining and processed food, agricultural and livestock product prices presented a mixed picture. While agricultural product prices decreased by 1.2%, livestock prices increased.
Analysis and Implications
The 2% CPI increase in February suggests that South Korea is managing to keep inflation within its target range. However, the persistent rise in dining out and processed food costs warrants close attention. This trend could disproportionately affect lower-income households, who spend a larger portion of their income on these essential items.
The government’s focus on price stability is crucial, and continued monitoring of food prices will be essential to ensure that inflation does not erode the purchasing power of consumers. Future policy interventions might need to target specific areas, such as processed food production and distribution, to mitigate the impact on household budgets.
Future Outlook
Looking ahead, the trajectory of global commodity prices, particularly oil and agricultural products, will play a significant role in shaping South Korea’s inflation outlook. Furthermore, domestic factors such as wage growth and government subsidies could also influence consumer prices.
The Bank of Korea will likely continue to monitor inflation closely and adjust its monetary policy as needed to maintain price stability and support sustainable economic growth.
References:
- Yonhap News Agency. (2025, March 6). Detailed report: South Korea’s February CPI rises 2%. Retrieved from [Insert actual Yonhap News Agency URL here if available]
- Statistics Korea. (2025, March 6). February 2025 Consumer Price Index Trends. [Insert actual Statistics Korea URL here if available]
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