The Bank of Korea said, "Low-income families are burdened with higher prices."

It has been argued that inflation inequality intensifies because of the so-called "chip inflation" phenomenon, in which the price of low-priced products rises more during the inflation period.

The BOK said in a report titled "Post-Pandemic Chip Inflation and Inflation Inequality" that it came to this conclusion after analyzing effective prices between income deciles from January 2020 to September 2023 with processed food sales information.

The Bank of Korea analyzed that when comparing the price growth rate of the same item during the target period, low-priced products accounted for 16.4%, while high-priced products accounted for only 5.6%.

This is due to the demand side, which shifts demand to cheaper products when prices rise, and the supply side, which has low absorption capacity against cost shocks due to smaller margins for lower-priced products, the BOK explained.As the

'chip inflation' phenomenon mainly occurs during inflation, it is important to maintain a price stability stance through monetary policy, and it is necessary to focus on price stability for mid- and low-priced items during inflation, the BOK report suggested.