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Korea Inflation December 2022

Korea: Inflation stable in December

Inflation held steady at Novembers 5.0% in December, marginally lower than the market consensus of 5.1%. Looking at the details of the release, food and non-alcoholic beverages prices rose at a quicker pace in December compared to the previous month, while price pressures for housing grew at a weaker pace.

The trend pointed up slightly, with annual average inflation coming in at 5.1% in December (November: 5.0%). Meanwhile, core inflation fell to 4.1% in December, from the previous month’s 4.3%.

Finally, consumer prices increased 0.16% in December over the previous month, contrasting the 0.10% fall logged in November.

On 1 January, the countrys largest utilities firm, KEPCO, raised electricity rates by 9.5%. In addition, that same day, the government reduced its tax cut on gasoline from 37.0% to 25.0%. These measures mean inflation is likely to tick up slightly in the early months of 2023. That said, due to falling rent prices and weakening domestic demand, inflation is expected to fall close to the Bank of Koreas 2.0% target by the end of the year.

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