High inflation hits South Koreans’ wallets hard

High inflation persisting since 2022 has strained South Koreans financially, with wages failing to keep pace with rising prices, according to statistics revealed in March. 7.

Statistics Korea reported a significant jump in the country’s consumer price index last year, reaching 111.59 compared to 2021′s 102.5, marking the highest inflation rate in 26 year

Meanwhile, the households’ average real income has decreased. Despite a 6.9% increase in average monthly income from 2021 to 2023, reaching 4,043,832 won, real income decreased by 2% after adjusting for inflation.

In contrast, the U.S. economy managed to navigate last year’s global inflation shock smoothly, thanks to wages outpacing price increases. Nominal wage growth in the U.S. surpassed the inflation rate in February of last year, remaining consistently high, with real earnings growth recording at 0.8% for the year.

Amid soaring prices, individuals like Lee, a married office worker in their 40s, are resorting to online searches for ‘ugly’ or ‘imperfect’ agricultural products to cope with the rising costs. Lee explained, “A 3kg bag of apples costs about 30,000 won, but those with blemishes are about 5,000 won cheaper.”

They added, “While my salary may increase by 2% per year, the price of apples has surged by over 50%. Grocery shopping has become terrifying.”

The widening gap between income and rapid price rises is exacerbating living costs for Koreans, particularly impacting low-income groups with high Engel coefficients. These individuals face even tougher times amid the high inflation period, marked by sharp increases in agricultural prices.

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