Korea: Inflation inches down in February
March 3, 2014
Consumer prices added 0.27% over the previous month in February, which was below the 0.54% rise observed in January. The result represents the third consecutive increase in consumer prices. Higher prices for food and non-alcoholic beverages, as well as for housing, water, electricity gas and other fuels were again the main contributors to the monthly increase. Annual headline inflation inched down from 1.1% in January to 1.0% in February, which fell short of the 1.1% rate expected by the market. The annual reading remains well below the Central Bank's target range of between 2.0% and 4.0%. In February, annual average inflation inched down from 1.3% in January to 1.2% in February. Meanwhile, core consumer prices, which exclude more volatile items such as fresh food and energy, rose 0.22% over the previous month, matching the increase seen in January. Annual core inflation fell from 1.8% in January to 1.7% in February. The Central Bank expects annual average inflation to be 2.3% in 2014, before rising to 2.8% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 2.3% in 2014, which is down 0.1 percentage points from last month's forecast. According to the panel, average inflation should reach 2.8% in 2015.
Author: Ricardo Aceves, Senior Economist