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Korea Inflation May 2024

Korea: Inflation declines to lowest level since July 2023 in May

Inflation came in at 2.7% in May, down from April’s 2.9% and slightly below market expectations. May’s reading marked the lowest inflation rate since July 2023, but was still above the Central Bank’s 2.0% target, where inflation has been since early 2021. Looking at the details of the release, prices for housing and utilities grew at a weaker pace in May. In contrast, prices for transportation grew at a stronger rate.

The trend was unchanged, with annual average inflation coming in at April’s 3.1% in May. Meanwhile, core inflation edged down to 2.2% in May, from April’s 2.3%.

Lastly, consumer prices rose 0.09% in May over the previous month, broadly stable from April’s 0.04% rise.

With inflation still above target and likely to stay there until Q4, our panelists are unconvinced about the scope for monetary easing; most panelists only see rate cuts ensuing in Q4.

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