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Inflation in Korea
The Republic of Korea maintained moderate inflation rates from 2013 to 2022, averaging around 2%. Inflation was notably below this threshold in the years before the COVID-19 pandemic, and surged in 2021 and 2022 on economic recovery, supply constraints and high commodity prices. That said, inflation in 2022 was below the OECD average.
Consumer price inflation in Korea averaged 1.6% in the ten years to 2022, below the Asia-Pacific regional average of 2.1%. The 2022 average figure was 5.1%. For more inflation information, visit our dedicated page.
Korea Inflation Chart
Note: This chart displays Inflation Rate (CPI, annual variation in %) for Korea from 2014 to 2023.
Source: Macrobond.
Korea Inflation Data
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Inflation (CPI, ann. var. %, aop) | 0.4 | 0.5 | 2.5 | 5.1 | 3.6 |
| Inflation (CPI, ann. var. %, eop) | 0.7 | 0.6 | 3.7 | 5.0 | 3.2 |
| Inflation (Core, ann. var. %, aop) | 0.7 | 0.4 | 1.4 | 3.6 | 3.4 |
| Inflation (PPI, ann. var. %, aop) | 0.0 | -0.5 | 6.4 | 8.4 | 1.6 |
Inflation drops to lowest level since July 2023 in June
Inflation fell to 2.4% in June, from May’s 2.7%, markedly undershooting market expectations. June's figure marked the lowest inflation rate since July 2023. The decline was driven by moderating price pressures for housing and utilities, food and non-alcoholic beverages, and recreation and culture. However, inflation remained slightly above the Central Bank's 2.0% inflation target, where it has been since early 2021. Annual average inflation remained at May's 3.1% in June. Meanwhile, core inflation was unchanged, coming in at May's 2.2% in June. Finally, consumer prices fell 0.23% in June over the previous month, swinging from the 0.08% increase recorded in May. June's result marked the weakest reading since November 2023.
On the monetary policy implications, Nomura analysts said: “The CPI report bodes well for the inflation outlook, and we believe the probability of an August cut has increased to 30% from 15%. However, we maintain our baseline view that the BOK will lower its policy rate from October onwards. Our view is that KRW depreciation pressures continue to constrain the BOK’s ability to decouple from the Fed, as rate cuts before the Fed can increase the depreciation pressures on KRW.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Korean inflation projections for the next ten years from a panel of 29 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for Korean inflation.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Korean inflation projections.
Want to get access to the full dataset of Korean inflation forecasts? Send an email to info@focus-economics.com.
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