South Korea inflation remains below target. Watch in for more details!

South Korea Inflation Remains Below Target

Consumer inflation in South Korea eased more than forecast in September, falling below the central bank's target for the first time since early 2021, amid growing expectations of an imminent policy easing.

The consumer price index (CPI) rose 1.6 per cent in September from a year ago, following an increase of 2.0 per cent in August, Statistics Korea reported on Wednesday.

This reading was weaker than a median of 1.9 per cent, the figure predicted in a Reuters poll of economists, marking the slowest annual growth since February 2021.

The reading was below the Bank of Korea's (BOK) medium-term goal of 2 per cent, and discussions among policymakers and market participants about a possible interest rate cut have begun growing as the next policy meeting is scheduled for October 11.

The three-year rate-sensitive treasury bond yield slipped 3.4 basis points to 2.777 per cent, the lowest since April 2022.

The price stabilisation trend was continuing, Finance Minister Choi Sang-mok and BOK Deputy Governor Kim Woong said separately.

"The data once again backed the case for rate cuts," said Ahn Jae-kyun, a fixed-income analyst at Shinhan Securities, who expects the BOK to lower interest rates next week.

"There is a precedence of the BOK lowering interest rates after seeing inflation coming down to the 1% range from 2%, but what is different this time is household debt and the central bank's stance on it," Ahn said.

At its last meeting in August, the BOK maintained interest rates at a peak of 16 years of 3.50 per cent, even though inflation eased and domestic demand was weakening amid growing concerns that the board members have regarding the risks to financial stability associated with this hot housing market.

The CPI gained 0.1 per cent from the previous month, below an economists' forecast gain of 0.3 per cent and slower than the 0.4 per cent in the previous month. Petrol product prices declined 4.1 per cent, and private services fell 0.4 per cent, but gains in agricultural products and public utilities offset these declines.

Core CPI, which excludes volatile food and energy prices, advanced 2.0 per cent year on-year and was slower than a 2.1 per cent rise in the prior month, also the weakest since November 2021.

Consumer inflation in South Korea eased more than forecast in September, falling below the central bank's target for the first time since early 2021, amid growing expectations of an imminent policy easing.

Consumer inflation in South Korea eased more than forecast in September, falling below the central bank's target for the first time since early 2021, amid growing expectations of an imminent policy easing. The consumer price index (CPI) rose 1.6 per cent in September from a year ago, following an increase of 2.0 per cent in August, Statistics Korea reported on Wednesday. This reading was weaker than a median of 1.9 per cent, the figure predicted in a Reuters poll of economists, marking the slowest annual growth since February 2021. The reading was below the Bank of Korea's (BOK) medium-term goal of 2 per cent, and discussions among policymakers and market participants about a possible interest rate cut have begun growing as the next policy meeting is scheduled for October 11. The three-year rate-sensitive treasury bond yield slipped 3.4 basis points to 2.777 per cent, the lowest since April 2022. The price stabilisation trend was continuing, Finance Minister Choi Sang-mok and BOK Deputy Governor Kim Woong said separately. "The data once again backed the case for rate cuts," said Ahn Jae-kyun, a fixed-income analyst at Shinhan Securities, who expects the BOK to lower interest rates next week. "There is a precedence of the BOK lowering interest rates after seeing inflation coming down to the 1% range from 2%, but what is different this time is household debt and the central bank's stance on it," Ahn said. At its last meeting in August, the BOK maintained interest rates at a peak of 16 years of 3.50 per cent, even though inflation eased and domestic demand was weakening amid growing concerns that the board members have regarding the risks to financial stability associated with this hot housing market. The CPI gained 0.1 per cent from the previous month, below an economists' forecast gain of 0.3 per cent and slower than the 0.4 per cent in the previous month. Petrol product prices declined 4.1 per cent, and private services fell 0.4 per cent, but gains in agricultural products and public utilities offset these declines. Core CPI, which excludes volatile food and energy prices, advanced 2.0 per cent year on-year and was slower than a 2.1 per cent rise in the prior month, also the weakest since November 2021.

South Korea's inflation eases more than expected, fueling speculation of a rate cut

Consumer inflation in South Korea picked up in July, driven by supply-side pressures and bad weather, breaking three consecutive months of decline. The consumer price index climbed 2.6 per cent in July from a year earlier, official data released on Friday showed, a tad higher than the market's expectation of 2.5 per cent and moving up from June's 2.4 per cent, which was the lowest in 11 months.

This rise is in line with recent comments by the finance minister, who had anticipated that abnormal weather and base effects would lift the transient spike in inflation, with stabilisation expected from August. The Bank of Korea last month kept interest rates at a 15-year high of 3.50 per cent for a record twelfth straight meeting but hinted at possible rate cuts. However, the board continues to remain divided on the timing of such action.

The country's monthly CPI figure rose 0.3 per cent in July, following a 0.2 per cent decline in June, the fastest rise in five months, and higher than economists' median forecast of a 0.25 per cent gain. Petroleum products jumped by 3.3 per cent month-on-month, agricultural products by 0.9 per cent, with vegetable prices surging 6.3 per cent.

Annual core inflation, which strips out volatile food and energy items, remained unchanged at 2.2 per cent for the third month in succession. Steadiness in the core measure indicates that the underlying inflationary pressures continue to be moderate despite the recent rise in headline inflation.

Though the immediate outlook points to a slight increase in inflation, the Bank of Korea's stance against an interest rate rise does point to deeper concerns about the future of long-term economic stability. The coming months will be crucial in judging whether this inflationary trend is just a blip or something more persistent.

Consumer inflation in South Korea picked up in July, driven by supply-side pressures and bad weather, breaking three consecutive months of decline. The consumer price index climbed 2.

Consumer inflation in South Korea picked up in July, driven by supply-side pressures and bad weather, breaking three consecutive months of decline. The consumer price index climbed 2.6 per cent in July from a year earlier, official data released on Friday showed, a tad higher than the market's expectation of 2.5 per cent and moving up from June's 2.4 per cent, which was the lowest in 11 months. This rise is in line with recent comments by the finance minister, who had anticipated that abnormal weather and base effects would lift the transient spike in inflation, with stabilisation expected from August. The Bank of Korea last month kept interest rates at a 15-year high of 3.50 per cent for a record twelfth straight meeting but hinted at possible rate cuts. However, the board continues to remain divided on the timing of such action. The country's monthly CPI figure rose 0.3 per cent in July, following a 0.2 per cent decline in June, the fastest rise in five months, and higher than economists' median forecast of a 0.25 per cent gain. Petroleum products jumped by 3.3 per cent month-on-month, agricultural products by 0.9 per cent, with vegetable prices surging 6.3 per cent. Annual core inflation, which strips out volatile food and energy items, remained unchanged at 2.2 per cent for the third month in succession. Steadiness in the core measure indicates that the underlying inflationary pressures continue to be moderate despite the recent rise in headline inflation. Though the immediate outlook points to a slight increase in inflation, the Bank of Korea's stance against an interest rate rise does point to deeper concerns about the future of long-term economic stability. The coming months will be crucial in judging whether this inflationary trend is just a blip or something more persistent.

South Korean inflation edges upward amid supply-side pressures and weather anomalies

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

South Korea’s consumer inflation fell to the lowest level in eleven months in June, thus giving a hint to the policymakers. The domestic aspect showed slight annual inflation of the consumer price index in the region at 2.

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

South Korea's inflation slows to 11-month low, raising hopes for rate cuts

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South Korea's inflation slows sharply in October