The burden of grocery costs felt by South Korean consumers has now been confirmed in the data. While overall prices remain below the OECD average, food prices have reached levels comparable to Switzerland, ranking among the highest for a third consecutive year.
According to the OECD's price level statistics based on purchasing power parity (PPP) released on the 9th, South Korea's price index for food and non-alcoholic beverages stood at 146 in 2024, 46% higher than the OECD average of 100. In the comparison reflecting each country's purchasing power, Korea ranked as the second-most expensive nation for food prices among the 38 member countries, following Switzerland (147).
The PPP price index is a measure that compares actual perceived prices by reflecting each country's purchasing power rather than simple exchange rates. Korea's food price levels were significantly higher than those of Japan (121) and the United States (107), as well as France (100), Germany (95.2), and the United Kingdom (91.4). Depending on the country, the gap exceeded 50 points.
This trend is not a temporary phenomenon. Korea's food price level was 152 in 2022, tied for second place after Israel (155), and in 2023 it reached 150, overtaking Switzerland to rank first in the OECD. This year it eased somewhat to 146 but still remained the second-highest after Switzerland.
Beyond food, the price index for clothing and footwear, another essential consumption item, stood at 115, while education costs reached 108, both above the OECD average.
By contrast, the household final consumption (HFC) price index, which reflects overall consumption, stood at 78, below the OECD average. This ranked 23rd among member countries.
Prices for other consumption categories were relatively low, including housing (54.7), transport (75.3), recreation and culture (80.7), and food services and accommodation (93.6), pushing the overall price index below average. Yet food prices, which consumers feel every day, continue to remain at the highest level in the OECD.
Meanwhile, Korea's economic outlook is improving. In its "Asian Development Outlook" released on the 9th, the Asian Development Bank (ADB) raised its forecast for Korea's economic growth rate this year to 2.6% from the previous 1.9%, an upward revision of 0.7 percentage points. The ADB attributed this to growth stronger than expected in the first quarter and robust AI-driven exports centered on semiconductors, which it expects to substantially offset uncertainty stemming from the Middle East. However, it projected this year's inflation rate at 2.7%, higher than its previous forecast, citing factors such as rising international energy prices.
