Consumer prices in Busan, which fell in September for the first time since the statistics were compiled, backtracked for the second straight month in October.
According to the Dongnam Statistics Office, the consumer price index in Busan stood at 105.70 (2015=100) in October, down 0.4 percent from 106.15 in the same month last year.
Busan’s consumer prices fell 0.2 percent for the first time in September, followed by a higher fall in October.
Cost of living necessities fell 0.9 percent compared to October last year.
Prices of fresh food, including agricultural and fisheries, also fell 14.5 percent, exceeding the overall drop in consumer prices.
Busan’s consumer prices rose 0.8% from a year earlier in February this year, rising less than 1%, until it turned negative from September.
In particular, the fall in Busan’s consumer prices is more pronounced compared to the nation’s consumer prices which stopped falling from 0.4% in September to 0.0% in October.
As consumer prices continue to fall in Busan, there is a growing concern over deflation where prices of goods and services continue to fall across the economy.
When deflation occurs, it increases the purchasing power of the consumers in the short run; however, in the long run, consumer sentiment is dampened.
This will cause consumers to spend less and companies to hold off investment, leading to a vicious cycle of both consumption and investment falling.