Food prices have risen sharply due to the rapid inflation.
/Photography by Hwang Chae-yeon
Due to the lifting of social distancing and the warm weather, many people have started going out more frequently. When going out, they will be able to feel that the cost of various things has risen sharply compared to before. Even traveling the same distance, buying the same food, and enjoying the same activities now cost much more. Consumer prices, which have recently risen sharply, are burdening citizens. In recent years, expenses of things that are needed for our life such as food and oil have increased to the point where consumers can directly feel them. The continuous and rapid price rise has become a problem worldwide, as well as in Korea. The World Bank says soaring food and energy prices will continue for more than three years, bringing a crisis to households.
Rapid inflation in Korean society continues
According to a report by Statistics Korea on April 29th, 2022, Korea’s consumer prices rose 4.8 percent in April compared to the same month last year. The increase rate of consumer prices has remained in the three percent range for the five months since October last year, which recorded 3.2 percent. It is the largest increase in 13 years and eight months since October 2008 when the global financial crisis hit 4.8 percent. According to the Bank of Korea’s “2022 April Consumer Trend Survey” on April 27th, the expected inflation rate in April rose 0.2 percent points from last month to 3.1 percent. It was the highest figure in nine years. The high expected inflation rate is one of the critical indicators in that it affects actual prices. High expected inflation rates can also raise future prices and wages, thereby raising prices.
There have been several recent events in the world that have caused rapid inflation. The global pandemic of COVID-19 has shrunk the economy and caused prices to rise. The Bank of Korea’s research bureau’s price research team explained that the impact of global factors on consumer prices has dramatically expanded in the 2000s, and the impact has increased since the COVID-19 crisis. Also, the war between Russia and Ukraine has affected inflation. As a result, prices of food materials, including cooking oil and flour, and energy resources have risen significantly. In particular, the World Bank predicted that the costs of wheat would rise by 42.7 percent, barley by 33.3 percent, soybeans by 20 percent, cooking oil by 29.8 percent and chickens by 41.8 percent based on the dollar due to a sharp drop in exports from Russia and Ukraine. In addition, Indonesia has announced that it will stop exporting palm oil, which is expected to raise food prices further.
Consumers feel pressure in their daily lives
The living price index, considered a feeling price, exceeded the inflation rate. It means that the price of items that consumers feel has risen more than the pace of inflation. According to the “Consumer Price Trend” of Statistics Korea on May 7th, the living price index jumped 5.7 percent from the previous year to 108.49. (The living price index for 2020 is set at 100.) It is the largest increase in 13 years and eight months since August 2008.
Firstly, the prices of food have increased highly. Among the 144 foods that are the basis for measuring the living price index, 128 food prices have risen. Imported beef prices rose 28.8 percent from a year ago, chicken (16.6 percent), pork (5.5 percent), and domestic beef (3.4 percent) remained high. The price of cooking oil, which is the basis of food cooking, increased 22 percent from the previous year. Most vegetable prices have also been raised. Spinach prices rose 28.5 percent. The prices of chives (43.4 percent), radish (15.6 percent), potato (15.4 percent), mushroom (10.2 percent), cucumber (14.3 percent) and pumpkin (9.1 percent) rose, while fruit prices such as grapes (23 percent) and watermelons (28.3 percent) also rose. Food prices such as instant food (8.8 percent), cold noodles (8.2 percent), jajangmyeon (9.1 percent), kalguksu (8.2 percent), gimbap (9.7 percent), and chicken (9.0 percent) were also still high. The rising prices of ramen (10.6 percent), noodles (29.1 percent), bread (9.1 percent), and rice cakes (5.1 percent), which used to be eaten as a meal, deepened ordinary people’s concerns about their increased living expenses.
Secondly, the prices of fuel have also increased. Oil prices rose 63 percent to 102.82 dollars last month from 62.82 dollars a barrel in April 2021. During the same period, the price of liquefied natural gas rose 516 percent. The government cut oil taxes by 20 percent in November 2021 as a countermeasure against high oil prices, however, it decided to extend the oil tax cut until July due to the prolonged Russia-Ukraine war and even expand the scope of the cut. Moreover, rising public utility bills such as water bills (4.1 percent), electricity bills (11 percent), and city gas (2.9 percent) are also tightening the lives of people. Electricity and gas prices are also scheduled to rise further in October, being expected to add the burden on citizens.
In addition, consumers also felt discomfort with the price rise in terms of leisure. The “Entertainment and Culture” index, which includes toys, movie fees, and interest facility fees, rose 2.44 percent over the past two years, from 100.12 in 2020 to 100.4 in 2021 and 102.56 this year. Lotte World in Songpa-gu has raised the price of an adult free pass by 3,000 won since April, while Everland in Yongin-si had raised the price of annual membership by up to 40,000 won in March. Tickets for movie theaters, CGV have risen about 3,000 won over the past two years. CGV has raised movie fees since April 4th due to a drop in sales due to COVID-19. The price of regular movies was raised by 1,000 won, and special theaters and luxury theaters were raised by 5,000 won from 2,000 won.
According to a recent survey conducted by the Seoul Metropolitan Government under the theme “the 2030 generation now” in April, the second-largest source of stress among young people living in Seoul was financial problems, accounting for 22.7 percent. They are feeling difficulty and inconvenience with financial problems in their lives. It is often said that “Everything goes up except for my salary” between them. Not only young people but also older people feel the same way. For instance, Song, in his 40s, said, “It is not easy to go out since I need too much money to eat, go sightseeing, and buy gifts.” Lee, in her 50s, who just went grocery shopping at the mart, said, “There is not much to eat even if I go grocery shopping for 200,000 won. The monthly cost of food has become too much of a burden.” Likewise, consumers of all ages are suffering directly from the continuous rise in prices. As these economic problems are not expected to end quickly, the government’s countermeasures seem necessary.
Hwang Chae-yeon firstname.lastname@example.org
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