Korea: Inflation moderates in March

Consumer prices declined 0.1% in March from the previous month, according to the National Statistics Office of Korea. The result, which contrasted the 0.8% month-on-month increase recorded in February, was a four-month low and reflected lower prices for food and non-alcoholic beverages, transport, and recreation and culture. Market analysts were expecting a 0.2% increase in March.

Inflation hit 1.3% in March, coming in below market expectations of 1.6% and moderating slightly from February’s 1.4%. As a result, inflation slid further below the Bank of Korea’s 2.0% target rate. The core inflation rate, which excludes fresh food and energy prices, inched up to 1.4% in March from February’s 1.3%. Annual average inflation, meanwhile, declined for the third consecutive month to 1.7% in March (February: 1.8%).

Korea Inflation Forecast

FocusEconomics Consensus Forecast panelists expect inflation to average 1.8% in 2018, which is down 0.1 percentage points from last month’s forecast. In 2019, the panel expects inflation to average 2.0%.