South Korea inflation eases to 2.8% but remains above target
South Korea’s annual consumer inflation slowed to 2.8% in October from 2.9% in September, but stayed above the Bank of Korea’s 2% target. The moderation offers some relief, while persistent inflation and expectations of further rate increases keep attention on the central bank’s next policy decision.23
TL;DR
Still to come
- The Bank of Korea’s next policy meeting is scheduled for November 26, giving policymakers their next opportunity to weigh the latest inflation data against the prospect of further rate increases.
Consumer prices rose 0.2% from September, after increasing 0.3% the previous month, according to government data reported by Reuters. October’s annual rate was close to the 2.85% median forecast in a Reuters poll. A separate account of the data says inflation has slowed for a second consecutive month, following a rise to 3.1% in August.21
The slower headline reading has not ended concern about price pressures. Reuters reported that elevated global energy prices and rising household borrowing are keeping the prospect of further tightening in view. The Bank of Korea held its benchmark rate at 3.00% in October after raising it in July and August, and left the door open to more tightening.23
Prediction-market prices observed on November 2 put the estimated probability of South Korea’s December year-over-year inflation landing between 2.7% and 2.9% at about 44%. The estimate for inflation of at least 3.0% was also about 44%, indicating a sharp divide between those two possible year-end readings rather than a clear market consensus on which side of 3% inflation will finish.M1M3
Sources
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South Korea CPI grows less than expected in Oct By Investing.com · Investing.com India
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