2024-04-28 14:22:06
Agricultural product prices in April are also not reliable… High inflation ‘likely’ for 3 consecutive months
Double-digit growth rate in online shopping in March, interest in livestock and seafood product sales
Attention is being paid to whether consumer prices, which showed an increase rate of around 3% for two consecutive months, will stabilize in April. As the government has invested a large amount of money to control the soaring prices since mid-March, the prevailing opinion is that the price increase of agricultural, livestock and fishery products may slow down.
However, it is worrisome that negative news due to political instability in the Middle East may develop in earnest. Import prices, which showed an upward trend for three consecutive months until last month, are considered a cause that can increase the rate of increase due to fluctuating international oil prices and encourage a rise in domestic consumer prices.
Statistics Korea will announce ‘April Consumer Price Trends’ on the 2nd of next month. Consumer prices recorded an increase in the 3% range from August to December last year, but fell to the 2% range in January of this year, but remained in the 3% range for two consecutive months, including February (3.1%) and March (3.1%).
In particular, as the price of agricultural, livestock, and fishery products continued to remain strong, leading to an increase in prices, the government promoted price stabilization of agricultural, livestock, and fishery products by investing 150 billion won in emergency price stabilization funds, including support for unit price of delivery, support for discounts, and direct import of fruits.
There is an opinion that agricultural product prices in April may gradually show a downward trend. However, due to the political instability in the Middle East in March, the price of petroleum products, which has the highest price weight, may have surged, and there are opinions that consumer prices in April cannot be reassured due to the strong prices of processed foods and services.
There is also interest in the ‘March online shopping trends’ that Statistics Korea will announce on the 1st of next month. In February of this year, online shopping transactions amounted to KRW 18.9766 trillion, an 11.0% increase (KRW 1.8856 trillion) from the previous year. Although it failed to surpass 20 trillion won for five consecutive months, the double-digit growth rate continued.
Livestock and fisheries products showed the highest increase in 37 months since January 2021. It is analyzed that the purchase rate for products that had a high offline sales ratio is also rising rapidly, citing the convenience of transactions and high price competitiveness compared to offline shopping.
It is expected that the volume of online shopping transactions will continue to increase thanks to the expansion of Chinese e-commerce companies such as Ali Express (Ali) and Temu into the domestic market and the expansion of promotions by domestic companies such as Coupang to minimize user churn.
On the 30th of this month, industrial activity trends for March 2024 will be revealed. The production index of all industries (excluding seasonally adjusted, agriculture, forestry and fisheries) in February was 115.3 (2020 = 100), an increase of 1.3% from the previous month. This means that the increase has continued for four consecutive months.
In addition to manufacturing, which rose 3.4% from the previous month, increases were seen in semiconductors (4.8%), mechanical equipment (10.3%), and electronic components (12.5%), as well as communications and broadcasting equipment (-10.2%), cigarettes (-6.2%), and beverages (-10.2%). -3.2%), etc. showed a decline.
Changes in the retail sales index, an indicator of consumption, are also of interest. In February, sales of non-durable goods such as food and beverages (-4.8%) decreased, down 3.1% compared to the previous month. There are also high concerns that if there is no rebound in March, high prices and high interest rates may continue to weigh down consumer sentiment.
The Ministry of Strategy and Finance announces the national tax revenue status for March on the 30th. The concern is whether corporate tax revenue will meet expectations. If corporate taxes show a significant decline and a tax revenue collapse becomes a reality this year as it did last year, the Yoon Seok-yeol government’s continuous tax cut policy could also be on the chopping block.
The general view is that, considering the poor global economy last year and the worsening performance of companies, there could be a significant decline in corporate taxes. There is also considerable concern about a return to the tax revenue puncture caused by the decline in corporate taxes, which account for about 25% of total national tax revenue.
Last year’s annual corporate tax amounted to KRW 80.4 trillion, a decrease of 22.4% from the previous year, and the proportion of corporate tax compared to total national taxes was 23%. There are also predictions that the corporate tax portion may decrease further this year, falling to 20%.
The Organization for Economic Cooperation and Development (OECD) will release its world economic outlook for May on the 2nd of next month. Previously, OCED lowered Korea’s economic growth forecast for this year from 2.3% to 2.2%. There is a lot of room to see this as a sign of great uncertainty in the Korean economy as a whole.
However, since the real gross domestic product (GDP) growth rate for the first quarter of this year, which the Bank of Korea announced on the 25th, exceeded expectations by showing 1.3% compared to the previous quarter, the possibility that Korea’s economic growth rate forecast will be revised in this World Economic Outlook cannot be ruled out. .
[세종=뉴시스]
2024-04-28 14:22:06