Entry no.1 20300156 Kim han-gil

Price hikes starting to hit home
Consumers feeling the crunch in daily life as Misery Index climbs
March 21, 2008
Cartoonist Jeon Ae-suk, 38, is known for her thriftiness, but in this month alone, her living expenses have jumped 100,000 won ($98) because of recent commodity price rises.“I don’t go to theaters and never go out to eat these days,” Jeon said. “I’ve even stopped driving my car, but I still can’t compensate for grocery costs.”As Jeon shopped for ingredients to make kimchi on Tuesday, she found out that to make just three jars, it would cost her 20,000 won ($19.80).Last year at around the same time, she said it cost around 11,000 won to make five jars. Three heads of cabbage this year costs 6,000 won, compared to five for 5,000 won last year.Radishes fared no better, with one costing 1,200 won, about double the price from last year. In fact many items in the store have doubled in price ― or even more ― including cucumbers and mackerel.Korea’s consumer inflation rose 3.6 percent last month. This price index for raw materials and intermediate goods jumped 19.3 percent compared to last February. An official at the National Statistical Office commented, “After ramen prices went up, we see that people are really affected by the rise in living necessities, one of the hardest hit industries recently.” A Mr. Kim, a 35-year-old employee who gave only his surname, works at a large conglomerate. He said that last year he was always checking the gas meter in his car due to the rise in oil prices.But this year he is afraid to go out to eat lunch because of price jumps at restaurants. One item that has skyrocketed in price is jjajangmyeon, or black bean paste noodles. Industrial product prices are also expected to rise.Since late last year, large discount stores nationwide have been engaged in competition for their private brand products.Lotte Mart manager Ku Chang-mo, however, thinks this won’t stabilize prices because suppliers are negotiating to raise their prices even higher. The price hikes on China-made products have also been a big influence in Korea.“A coffee mug set, which cost 70 yuan [$9.88] late last year, cost 77 yuan last month,” said Moon Hyung-oh, who imports housewares from China. “Overall, the cost of Chinese products rose 10 to 15 percent and it will rise again soon.” For now, the forecast looks gloomy as prices continue to rise.“In the past, raw material price increases have not affected the everyday lives of the public to this extent, but now, with the price of oil, grains and raw materials going up at once, and with an unstable won, the impact is being felt more closely by citizens,” said Jang Jae-chul, chief researcher at Samsung Economic Research Institute. The Misery Index measures the economic and social costs for a country with inflation problems by adding the unemployment rate to the inflation rate. Monitored by the LG Economic Research Institute, the index last December stayed at 11, compared to 8.5 in September. By Special Report Team JoongAng Ilbo [jainnie@joongang.co.kr]