New Delhi

South Korea’s consumer inflation fell to the lowest level in eleven months in June, thus giving a hint to the policymakers.

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The domestic aspect showed slight annual inflation of the consumer price index in the region at 2.5 per cent year-on-year in June from 2.3 per cent in May, representing the slowest inflation rate since July 2023.

This fell below the median estimate of 2.7 per cent forecast by economists through the averages from the Reuters poll.

According to the country’s vice finance minister, inflation may settle at a low-to-mid 2 per cent level possibly towards the second semester.

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It also promised to sustain measures for regulating prices that have prevailed over the previous six months.

Bank of Korea (BOK) recognised the recent change in the inflation rate as good news as it is now in the mid-2 per cent region.

The inflation rate will be observed, specifically, its approach to the target level of 2 per cent. Notably, the CPI also fell to a minus of 0. 2 per cent lower than in the previous month, which was the first time drop in seven months.

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Cuts in the global agricultural and petroleum prices helped to push the index down. In April, Governor Rhee Chang-yong of BOK stated that consumer inflation would also persist to ease hence fuelling expectations by persons of rate cuts for the BOK by the close of the year.

The BOK decided to leave its interest rates unchanged for the eleventh time in a row in May next meeting is due on July 11, 2012.

The annual measures of core CPI that leave out the fluctuating food and energy prices remained steady with 2.2 per cent annualised month-on-month basis in June to 2 per cent year-on-year.

(With inputs from Reuters)