Prices of daily necessities grew at record slow pace in 2009

SEOUL, Jan. 5 (Yonhap) -- Prices of daily necessities in South Korea grew at the
slowest pace on record last year as a fall in crude oil prices drove down the
overall manufactured product prices, data showed Tuesday.

According to Statistics Korea, the nation's daily necessity price index rose 2.1
percent last year from a year earlier, the slowest ever since the agency started
to compile related data in 1996. The index is based on analysis of 152 items that
consumers purchase most frequently on a daily basis.
The index rose 6 percent in 1996 and jumped 11.1 percent in 1998 before making a
steady decline until 2007 when it gained 3.1 percent from a year earlier.
But the index, a measure that best reflects prices of items related to consumers'
daily life, grew at a faster pace of 5.4 percent in 2008 mainly due to a hike in
crude prices.
The decline in 2009 is attributed to such a base effect from the previous year's
jump and relatively lower import prices of crude oil, according to the statistics
agency.
Oil prices averaged at US$94 per barrel in 2008 but fell 34 percent to $62 per
barrel last year. The central bank says that a 1-percent fall in oil prices can
lower consumer prices by 0.02 percentage point.
However, price increases of fishery and agriculture products grew relatively
faster than other items last year, remaining a drag on government efforts to
stabilize the overall consumer prices, data provided by the agency showed.
According to the data, the price index for fresh products consisting of 51
fishery, vegetables, fruits and other produce jumped 7.5 percent last year from a
year earlier, marking the highest since 2004 when the corresponding figure rose 8
percent.
kokobj@yna.co.kr
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