Korea Inflation


Korea: Inflation inches up in May, remains well below target

June 2, 2015

In May, consumer prices increased 0.3% over the previous month, which was up from the 0.1% rise tallied in April. May’s print mainly reflected higher prices for food and non-alcoholic beverages as well as for transport. In contrast, prices for housing and utilities decreased in May compared to the previous month.

Annual headline inflation inched up from 0.4% in April to 0.5% in May, which was in line with market expectations. April’s print had marked the lowest reading since July 1999. Despite the slight increase in May, inflation remains well below the Central Bank’s target range of 2.5%–3.5%. Annual average inflation ticked down from 1.0% in April to 0.9% in May.

Core consumer prices, which exclude fresh food and energy prices, rose 0.3% in May over the previous month, which was up from the 0.1% tallied in April. Regarding annual figures, core inflation increased from 2.0% in April to 2.1% in May.

The Central Bank expects annual average inflation of 0.9% in 2015 and 2.2% in 2016. FocusEconomics Consensus Forecast panelists expect inflation to average 1.1% in 2015, which is down 0.2 percentage points from last month’s forecast. In 2016, the panel expects average inflation to reach 2.0%.

Author:, Economist

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Korea Inflation Chart

Korea Inflation May 2015

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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