Korea Inflation January 2017


Korea: Inflation starts 2017 with a strong increase

February 2, 2017

Consumer prices jumped up 0.9% from the previous month in January, well above the 0.1% rise in December. The result was mainly driven by higher prices for housing, water, electricity, gas and other fuels.

Inflation climbed from 1.3% in December to 2.0% in January, which marks the highest level since October 2012. The result matched the Central Bank’s inflation target of 2.0%. Annual average inflation edged up from 1.0% in December to 1.1% in January. Meanwhile, core inflation, which excludes fresh food and energy prices, rose from 1.2% in December to 1.5%.

The low base of comparison in 2016, when subdued global energy prices kept inflation low, will continue to support an upward trend in the coming months.

The Bank of Korea expects inflation to average 1.8% in 2017 and 1.9% in 2018. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2017, which is up 0.1 percentage points from last month’s forecast. In 2018, the panel expects inflation to average 1.8%.

Author:, Senior Economist

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Korea Inflation Chart

korea inflation january 2017

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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