Korea Inflation


Korea: Consumer prices drop in September

September 30, 2014

In September, consumer prices fell 0.06% over the previous month, which contrasted the 0.17% increase recorded in August. The monthly decrease reflected lower prices for transport, communication, and recreation and culture, which were partially offset by higher prices for food and non-alcoholic beverages, household equipment, and restaurants and hotels.

Annual headline inflation also slowed down from 1.4% in August to 1.2% in September, which was below the 1.5% the market had expected. September’s annual reading was the lowest since February 2014. Meanwhile, annual average inflation remained unchanged at August’s 1.3%, which was on par with the results from both June and July.

Core consumer prices, which exclude fresh food and energy prices, decreased 0.05% over the previous month and contrasted the 0.07% increase tallied in August. As a result, September was the first month since August 2013 in which prices fell. Annual core inflation fell from 2.4% in August to 1.9% in September.

The Central Bank has revised downwards its inflation forecasts. It expects an annual average inflation of 1.4% in 2014 and of 2.4% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2014, which is down 0.1 percentage points from last month’s forecast. In 2015, the panel expects average inflation to reach 2.3%, which is also down 0.1 percentage points from last month’s forecast.

Author:, Economist

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