Korea: Inflation spikes to a 16-month high in September

According to the National Statistics Office of Korea, consumer prices rose 0.7% over the previous month in September, up from the 0.5% rise in August. The increase was primarily due to higher prices for food and non-alcoholic beverages, which more than outweighed lower prices for furnishing, household equipment and routine maintenance.

Inflation surged to 1.9% in September from 1.4% in August, representing a 16-month high. This overshot market analysts’ expectations of 1.5% and left the rate very close to the Bank of Korea’s 2.0% target. Core inflation, which excludes fresh food and energy prices, accelerated from August’s 0.9% to 1.3% Annual average inflation, meanwhile, remained steady at August’s 1.5%.

Korea Inflation Forecast

FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2018, which is down 0.1 percentage points from last month’s forecast. In 2019, the panel expects inflation to average 1.9%, which is also down 0.1 percentage points from last month’s forecast.