Korea Inflation


Inflation holds well below target in August

In August, consumer prices increased 0.2% over the previous month, which matched the reading tallied in July. August’s print reflected that higher prices for food and alcoholic beverages more than offset a decline in prices for transport and health services.

Inflation in August remained at 0.7% for the third consecutive month, which was in line with market expectations. August also marked the ninth straight month with inflation under 1.0%, which is well below the Central Bank’s target range of 2.5%–3.5%. Annual average inflation inched down from 0.8% in July to 0.7% in August.

Core consumer prices, which exclude fresh food and energy prices, increased 0.2% in August over the previous month, which equaled the reading registered in July. Regarding annual figures, core inflation inched up from 2.0% in July to 2.1% in August.

The Central Bank expects annual average inflation of 0.9% in 2015 and 2.2% in 2016. FocusEconomics Consensus Forecast panelists expect inflation to average 1.1% in 2015, which is down 0.2 percentage points from last month’s forecast. In 2016, the panel expects average inflation to reach 2.0%.

Author:, Economist

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Korea Inflation Chart

Korea Inflation August 2015

Note: Month-on-month and year-on-year changes of consumer price index in %.
Source: National Statistics Office of Korea (KOSTAT)

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