Korea: Inflation remains stable in July for the second consecutive month
August 1, 2018
According to the National Statistics Office of Korea, consumer prices rose 0.2% over the previous month in July, contrasting the 0.2% fall over the previous month in June. The increase was primarily due to higher prices for food amid an extended heatwave in Korea that has put pressure on crop yields. Prices for recreation and culture were also sharply higher than the previous month. Meanwhile, prices were lower for health, communication, and clothing and footwear in July.
Inflation was stable at 1.5% in July, unchanged from June. This undershot market analysts’ expectations of 1.7% and left the inflation rate below the Bank of Korea’s 2.0% target. Core inflation, which excludes fresh food and energy prices, ticked down to 1.0% in July from 1.2% in June. Annual average inflation, meanwhile, slowed to 1.6% in July from 1.7% in June.
Korea Inflation Forecast
FocusEconomics Consensus Forecast panelists expect inflation to average 1.7% in 2018, which is unchanged from last month’s forecast. In 2019, the panel expects inflation to average 2.0%.
Author: Edward Gardner, Economist