South Korea’s headline inflation has shown signs of easing after three consecutive months of acceleration, although it still remains well above the central bank’s target of 2%. According to the country’s statistics office, the benchmark consumer-price index rose by 3.3% in November compared to the previous year, which is a slight drop from the 3.8% increase witnessed in the previous month. The market consensus had predicted a gain of 3.6% for November.
The data from the office revealed that lower oil and energy prices were the main contributors to the easing of price growth in November. On a monthly basis, the index decreased by 0.6% in November following a 0.3% rise in October.
When looking at the core consumer-price index, which excludes volatile food and energy prices, there was a 3.0% increase from a year ago, remaining unchanged from the previous month of November. In October, this index saw a year-on-year gain of 3.2% and a 0.3% increase compared to the prior month.
Recognizing the persistent nature of inflation in the country, the Bank of Korea recently revised its inflation forecasts for this year and the next. It anticipates an average inflation rate of 3.6% in 2023 and 2.6% in 2024, which is slightly higher than its previous estimates of 3.5% and 2.4%, respectively.
The central bank has indicated that it will maintain its base rate at 3.50% for an extended period before considering any policy easing.