As the consumer price inflation rate rises back to the 3% range, the Bank of Korea has projected that inflation will continue its upward trend.
On September 2, the Bank of Korea held a 'Price Situation Review Meeting' led by Deputy Governor Lee Ji-ho to assess recent price trends and future forecasts.
According to the National Data Agency, the consumer price index last month was 120.05 (2020=100), reflecting a 3.1% increase compared to the same month last year. The consumer price inflation rate remained in the 2% range from January to April this year, rose to the 3% range in May and June, dipped to 2.8% in July, and has now climbed back to the 3% range.
The Bank of Korea noted that the significant base effect from discounts on communication fees in August contributed to the rise in consumer prices. The increase in petroleum prices was slightly lower at 14.2% compared to the previous month’s 15.5%, while prices for agricultural, livestock, and fishery products fell from a 0.9% increase in July to a decrease of 2.6% in August due to government discount policies.
Core inflation, which excludes volatile items, saw a notable increase to 3.4%, up from 2.6% the previous month, driven by rising prices in personal services and durable goods, along with the base effect from communication fees.
The Bank of Korea expects the consumer price inflation rate in September to be lower than in August due to the fading base effect, but anticipates that the upward trend will continue, particularly in core items.
Deputy Governor Lee stated, "Given the transmission of cost shocks and increasing demand-side pressures, we expect core inflation to remain elevated, and we will monitor the price situation with vigilance."
* This article has been translated by AI.
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