Price Stability? The Perception Was Different... Household Burden Remains

[Financial News] There is criticism that time has passed without any clear measures on the price issues directly affecting the lives of the people since the inauguration of the Lee Jae-myung government. The government emphasizes 'price stability' by stating that the consumer price inflation rate is maintained at 2%, but the prices perceived by the public for dining tables and shopping baskets are entirely different. While the government has been engrossed in major policy issues such as tariff negotiations and tax reforms, perceived prices for dining out and groceries have quietly but surely risen.
 According to data released by Statistics Korea on the 17th, the living cost index in July rose by 2.5% compared to the same month last year, and food items rose by 3.2%. This is a higher figure than the consumer price inflation rate (2.1%) during the same period. The living cost index is calculated based on 144 items frequently purchased by households, reflecting perceived prices more directly.
 Looking at the number 2.1%, it may not seem like an overheated price situation when looking at detailed items, but it is evident that the burden on people's livelihoods is increasing. Processed foods rose by 4.1%, livestock products by 3.5%, seafood by 7.3%, and dining out prices also rose by 3.2%, far exceeding the average inflation rate. The reality is that the perceived price is much higher than the statistics, as price increases are more pronounced for items that account for a large portion of household consumption.
 Nevertheless, the price issue seems to be far down the list of policy priorities. Although price task force (TF) meetings and industry consultations are being held, the realistic price stabilization effect is limited.
 In the dining industry, contrary to the government's request, price increases are continuing. In August, dining brands such as Nene Chicken, Norang Tongdak, and Outback have successively raised the prices of major menus by 4-10%.
 The government provided a livelihood consumption coupon of 150,000 won per person last month to boost domestic demand. However, there are concerns that this could rather spur price increases as demand for food and dining out surges.
 According to Statistics Korea, the price of domestic beef in July rose by 4.9% compared to the previous month, and the price of dining out beef rose by 1.6%. The government drew a line, saying, "The price stimulus effect of the consumption coupon is limited." However, there is also an analysis that inflationary pressure may increase as distribution and consumption continue in earnest after August.
 With the increase in demand due to the Chuseok holiday season in September-October also forecasted, it is expected that the upward trend in perceived prices will be difficult to curb for the time being. In particular, dining out prices are continuously rising due to increases in raw material costs and labor costs, making it difficult for the government to control prices.
 Civil society and consumer groups unanimously say that the government should more actively make price stabilization a national agenda. A consumer group official said, "The government still says prices are stable, but ordinary people are deeply concerned about even the price of dining tables," and "It is time to elevate prices to the top national priority."

imne@fnnews.com Hong Ye-ji Reporter