South Korea’s inflation rate fell for the fifth consecutive month in June, which will support the Bank of Korea’s policy meeting next week to keep interest rates unchanged.
Consumer prices rose 2.7% in June from a year earlier, the smallest increase since September 2021, and below the 2.8% forecast by economists, Statistics Korea data showed on Tuesday. Core inflation, which excludes oil and agricultural products, was 4.1%, falling for a third straight month and hitting the lowest level since May 2022.
While it is good news that headline inflation continues to slow, it remains above the central bank’s 2% target and core inflation remains stubborn. The data provided room for the Bank of Korea to continue to pause interest rate hikes when it makes a decision on July 13.
The Bank of Korea has kept the policy rate unchanged at 3.5% in the previous three policy meetings, waiting for inflation to continue to cool. Meanwhile, growth momentum in South Korea has weakened amid a slowdown in global demand. And a weaker-than-expected recovery in China also raises the risk.
2023-07-04 00:10:00
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