Korea Inflation October 2019


Korea: Consumer prices year-on-year stable in October

November 1, 2019

Consumer prices increased 0.2% over the prior month in October, down from September’s 0.4% rise. Higher prices for household equipment and maintenance, and transport were chiefly behind October’s uptick.

Year-on-year consumer prices were flat in October, contrasting September’s 0.4% fall, and remained well below the Bank of Korea’s 2.0% target rate. Core inflation—which excludes fresh food and energy prices—edged up to 0.8% in October from 0.6% in September. Meanwhile, annual average inflation inched down to 0.6% in October from 0.8% the month prior.

Commenting on September’s print, analysts at Goldman Sachs, noted:

“Headline inflation is likely moving away from temporarily negative figures, as was flagged by the BOK governor and MPC statement in recent policy rate decision meetings. That said, inflation by various measures is still meaningfully lower than the central bank’s medium-term target, and we continue to believe low inflationary pressures will allow the BOK to keep an accommodative monetary policy stance for a prolonged period.”

Our panelists see inflation averaging 1.3% in 2020, which is down 0.2 percentage points from the previous month’s forecast. In 2021, our panelists expect inflation to average 1.6%.

Author:, Economist

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