The consumer price inflation rate has dropped to the 2% range for the first time in three months, but the Bank of Korea forecasts that it may rise again this month. Excluding food and energy, core inflation is expected to continue its upward trend for the time being.
On August 4, the Bank of Korea held a price situation review meeting led by Deputy Governor Lee Ji-ho to assess recent price trends and future outlooks.
According to the National Data Agency, the consumer price index last month was 119.77 (2020=100), reflecting a 2.8% increase compared to the same month last year. The inflation rate remained in the 2% range from January to April this year, rose to the 3% range in May and June, and has now returned to the 2% range after three months.
The Bank of Korea noted that the consumer price increase in July slowed compared to the previous month due to factors such as a reduction in oil prices and a decline in agricultural product prices. The inflation rate for living expenses, which heavily relies on oil and agricultural products, also significantly decreased to 2.5%.
In contrast, core inflation saw a slight increase as cost shocks were transmitted over time, leading to a rise in durable goods prices.
The Bank of Korea anticipates that the consumer price inflation rate may expand again in August. This is attributed to a base effect from significant discounts on communication fees by some mobile carriers last August, which is expected to result in a higher year-on-year inflation rate.
Deputy Governor Lee stated, "Given the high uncertainty related to the Middle East conflict, government measures for price stability are expected to act as downward pressure. However, due to the transmission of cost shocks and increased demand-side pressures, core items are likely to continue experiencing high inflation rates, so we will remain vigilant in monitoring the price situation."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.