Korea Inflation February 2018


Korea: Inflation accelerates in February, spurred by January's minimum wage increase

March 6, 2018

Consumer prices increased 0.8% in February from the previous month, according to the National Statistics Office of Korea. The result, which followed the 0.4% month-on-month increase recorded in January, was the highest in over one year and was spurred by higher prices for food and non-alcoholic beverages, and recreation and culture. Market analysts were expecting a smaller 0.5% increase in February.

Inflation hit 1.4% in February, surpassing market expectations of 1.2% and accelerating from January’s 1.0%. The acceleration in February, which was largely caused by a feed-through effect from the minimum wage hike in January, means that inflation is now closer to the Bank of Korea’s 2.0% target rate.

The core inflation rate, which excludes fresh food and energy prices, accelerated to 1.3% in February from January’s 1.2%. Annual average inflation, meanwhile, dipped to 1.8% in February from 1.9% in January.

FocusEconomics Consensus Forecast panelists expect inflation to average 1.9% in 2018, which is unchanged from last month’s forecast. In 2019, the panel expects inflation to average 2.0%.

Author:, Economist

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Korea Inflation Chart

Korea Inflation February 2018 0

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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