Korea: Inflation hits record low in August
Consumer prices increased 0.2% over the prior month in August, contrasting July’s 0.3% fall. Higher prices for food and non-alcoholic beverages, and recreation and culture were chiefly behind August’s uptick.
Year-on-year consumer prices were flat in August, weaker than July’s 0.6% rise, moving further below the Bank of Korea’s 2.0% target and marking an all-time low. Moreover, core inflation, which excludes fresh food and energy prices, edged down to 0.8% from 0.9% in July, while annual average inflation inched down to 1.0% from July’s 1.1%. Weak price pressures can be attributed in part to muted economic activity, and could provide ammunition to the Central Bank to carry out further easing.