South Korea: Price index ignores seasonality, inciting controversy

South Korea

Market & Price Trends

Published Mar 25, 2024

Tridge summary

Statistics Korea's consumer price index has been criticized for not accurately reflecting the seasonal characteristics of agricultural products, leading to controversy over agricultural product prices. The index, which saw a 3.1% rise in February, was heavily influenced by an 11.4% increase in the agricultural, livestock, and fishery products index, including items like watermelons and melons that are not typically consumed in February. The National Statistical Office is considering including the cost of own housing in the consumer price index revision in 2025, which could reduce the impact of agricultural products on prices and lower the management burden.

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Original content

It is pointed out that Statistics Korea's consumer price index failed to reflect the seasonal characteristics of agricultural products that are mainly produced and consumed at specific times, further inciting the recent controversy over agricultural product prices. The ‘February Consumer Price Trends’ announced by Statistics Korea earlier this month became a catalyst for the recent controversy over agricultural product prices. The consumer price index in February was calculated to have risen 3.1% compared to the previous year, and analysis showed that the 11.4% rise in the agricultural, livestock and fishery products index had a significant impact. The problem is that watermelons and melons, which are not actually consumed in February, also affected the calculation of this index. The National Statistical Office calculates the price index through the ‘flat’ process during short periods (flat period) when certain agricultural products are not shipped. The flat items are determined ...

Source: Nongmin