Consumer Prices Decline for 1st Time

  • By Shin Su-ji

    September 04, 2019 11:22

    Consumer prices declined last month for the first time since Korea began tallying statistics in 1965, raising concerns of deflation as consumers still do not open their wallets.

    Statistics Korea said Tuesday that consumer prices stood at 0.0 point in August, down 0.04 percent from a year ago.

    The biggest decline was in agricultural produce, which plummeted 7.3 percent. Prices of vegetables alone plunged 17.8 percent thanks to a bumper harvest as well as a comparison with exceptionally high prices last summer. Prices of oil products also fell 6.6 percent due to plummeting international oil prices.

    People shop for groceries in a supermarket in Seoul on Tuesday. /Yonhap

    Meanwhile the economy shows no sign of recovering. A second-quarter economic growth estimate announced by the Bank of Korea on Tuesday rebounded a mere one percent, from the previous quarter at 0.4 percent.

    The government said low consumer prices do not yet amount to deflation but are the result of supply outpacing demand. But since consumption and investment remain weak, analysts worry that deflation could set in if prices keep falling.

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