Input 2020.12.31 11:04
The lowest inflation rate for eating out since 2000
Rent for 7 consecutive months from the same month of the previous year
This year, the annual consumer price increase rate rose 0.5% from the previous year, reaching the 0% level for the second consecutive year following last year (0.4%). During the same period, source prices excluding food and energy rose 0.4%, recording the lowest rate in 21 years. The declined inflation rate was offset by rising shopping cart prices and rent. As the spread of the new coronavirus infection (Corona 19) acts as a constant downward pressure on the inflation rate, among experts there are concerns about deflation (a phenomenon in which the prices of goods and services in the overall economy continue to decline).
On the 31st, the National Statistical Office announced the’December 2020 and Annual Consumer Price Trends’. Excluding food and energy, the rate of increase in source prices was 0.4%, the lowest since 1999. The source price is an index that can identify the key trend of inflation, excluding items that are greatly affected by seasonal factors or temporary shocks. Among the total 460 items, the National Statistical Office measures 407 items excluding agricultural products and petroleum products.
Ahn Hyung-joon, the National Statistical Office’s Economic Trend Statistical Officer (Director), explained, “Consumer prices have slowed this year due to policy support such as lower petroleum prices and free education. did. The price of agricultural and fishery products, representing the price of shopping carts, rose 6.7% year-on-year.
By item, ▲ pork (10.7%) ▲ domestic beef (8.3%) ▲ cabbage (41.7%) ▲ onions (45.5%) ▲ mackerel (12.8%) ▲ apples (7.7%) rose significantly. As demand for home food increased due to social distancing and the first disaster subsidies provided to the public, the inflation rate of livestock products such as pork and domestic beef increased by 7.3%% compared to the previous year. In the case of agricultural products, prices were weak last year due to favorable weather conditions, but this year, it is analyzed that the base effect overlapped with the longest rainy season and heavy rain.
The rent was -0.1% last year, but it has increased to 0.2% this year. Jeonse and monthly rent rose by 0.3% and 0.1%. It was negative last year from 0.6% in 2018, and then returned to positive again this year. As of the month of December, the rate of increase in rent price was 0.7%, but it has increased for eight consecutive months since last May. During the same period, the jeonse rose 0.9%, the highest rate since December 2018 (0.9%). Monthly rent was 0.4%, the highest increase since November 2016 (0.4%) following last month.
Experts are raising concerns about deflation as the social distancing continues with Corona 19. This is because inflation is not rising because consumption is not smooth despite the effects of rising rent and vegetable prices. Usually, the low price trend is interpreted as a sign of a recession.
Professor Kim So-young of the Department of Economics at Seoul National University said, “For the past two to three years, prices have not risen due to lack of demand due to the recession. This year, it is analyzed that it has been worsened by the influence of Corona 19.” The decline would also have had an effect on the decline in the rate of increase in consumer prices.”
Due to social distancing, dining out prices this year fell from 1.9% last year to 0.8% this year. Eating out prices were the lowest since 2000 (0.8%), when the aftermath of the International Monetary Fund (IMF) financial crisis remained.
Affected by social distancing ▲Overseas group travel expenses (-6.1%) ▲ Accommodation (hotel -6.1%, condo -2.2%, inns -1.4%) ▲Car rental fee (-9.1%) ▲ Domestic airfare (-1.0%), etc. There was this. In the case of indoor multi-facilities classified as banned or restricted businesses, ▲PC cafe -1.1% ▲Bowling alley 0.1% ▲Billiard hall 0.1% ▲Karaoke 0.8% ▲Lesports 0.5% ▲Reading room 0.4%, etc. also showed low inflation rate.
In addition, the inflation rate of personal services excluding dining out has slowed from 1.8% last year to 1.5% due to the expansion of health insurance coverage. The addition of free high school first education also affected the slowdown. The inflation rate of’Personal Services’, which combines dining out prices and personal services other than dining out, rose only 1.2%. This is the lowest since the increase of 1.1% in 2012.
Director Ahn said, “I see the cause of the low inflation in two categories: the continued impact of Corona 19 and the impact of policy support.” City gas also fell 1.4% from July,” he explained. In the case of policy support, he added that support for policies related to Corona 19, such as support for communication expenses, acted as downward pressure on public service prices.