Korea Inflation


Korea: Inflation rises to 19-month high in May

June 3, 2014

In May, consumer prices added 0.17% over the previous month. The print came in above the 0.06% increase observed in April and mainly reflected higher prices for furnishing, household equipment and housing maintenance as well as for recreation and culture.

Annual inflation rose from 1.5% in April to 1.7% in May. The reading overshot the 1.6% rise the market had expected and constituted the highest level since October 2012. The annual reading is still below the Central Bank’s target range of between 2.5% and 3.5%. Meanwhile, annual average inflation ticked up from 1.2% in April to 1.3% in May.

Core consumer prices, which exclude fresh food and energy prices, rose 0.26% over the previous month, which was up from the 0.18% increase recorded in April. Annual core inflation inched down from 2.3% in April to 2.2% in May.

The Central Bank sees annual average inflation at 2.1% in 2014, before rising to 2.8% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 2.0% in 2014, which is unchanged from last month’s forecast. In 2015, the panel expects average inflation to reach 2.6%

Author:, Senior Economist

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Korea Inflation Chart

Korea Inflation May 2014

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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