Inflation in Korea
Korea - Inflation
Inflation picks up slightly in December
Consumer prices increased 0.2% over the prior month in December, contrasting November’s 0.6% decrease. Higher prices for food and non-alcoholic beverages, and household equipment and maintenance were chiefly behind December’s rise.
Inflation increase to 0.7% in December, following November’s 0.2% rise, but remained well below the Bank of Korea’s 2.0% target rate. Core inflation—which excludes fresh food and energy prices—edged up to 0.6% in December from 0.5% in November. Annual average inflation was stable at 0.4% in December from the month prior.
Going forward, inflationary pressures are projected to perk up this year as lower interest rates—particularly ultra-low mortgage rates—support household spending and credit demand. Meanwhile, strong government spending should also support wage growth and job creation, further fueling inflation. That being said, relatively tepid economic growth, elevated household debt and a subdued housing market will likely keep inflationary pressures comfortably below the Bank of Korea’s 2.0% target rate.
FocusEconomics panelists forecast inflation will average 1.1% in 2020, which is down 0.2 percentage points from last month’s forecast, and 1.4% in 2021.
Korea - Inflation Data
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Inflation Rate (CPI, annual variation in %) | 1.3 | 1.3 | 0.7 | 1.0 | 1.9 |
Korea Inflation Chart
Source: Korea National Statistics Office and FocusEconomics calculations.
Korea Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 1.68 | 1.55 % | Dec 31 |
| Exchange Rate | 1,156 | 0.21 % | Dec 31 |
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Economic News
Korea: BOK stands pat in January and turns less dovish
January 17, 2020
At its 17 January monetary policy meeting, the Bank of Korea (BOK) voted to keep the base rate unchanged at 1.25%, as had been widely expected by market analysts.
Korea: Manufacturing PMI improves in December for the first time since April 2019
January 2, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) ticked up from 49.4 in November to 50.1 in December, slightly higher than the 50-threshold that separates an improvement from deterioration in the manufacturing sector over the previous month. The slight improvement in December was driven by an increase in output and new orders.
Korea: Exports contract at a softer pace in December
January 2, 2020
Merchandise exports decreased 5.2% year-on-year in December, weaker than the 14.4% drop recorded in November, totaling USD 45.7 billion in December (November: USD 44.1 billion).
Korea: Inflation picks up slightly in December
December 31, 2019
Consumer prices increased 0.2% over the prior month in December, contrasting November’s 0.6% decrease.
Korea: Forward-looking manufacturing business confidence slightly less pessimistic in January
December 31, 2019
The Bank of Korea’s forward-looking business confidence indicator for manufacturers ticked up to 73 in January from 71 in December, while confidence in the non-manufacturing sector also increased to 75 points in January from 74 in the month prior.
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