Korea: Inflation rises back above target
December 1, 2011
In November, consumer prices rose 0.10% over the previous month, contrasting both the 0.19% drop recorded in October and the 0.49% decrease observed in November 2010, and marking the first monthly rise after two consecutive drops. As a consequence, annual inflation picked up from 3.6% in October (previously reported: +3.9%) to 4.2% in November. As a result of November's increase, annual inflation rose back above the Central Bank's target range of 3.0% 1.0 percentage points. The core inflation index, which excludes more volatile items such as fresh food and energy, rose 0.29% over the previous month, which contrasted the 0.10% drop observed in October and was above the flat reading recorded in November 2010. Consequently, annual core inflation picked up from 3.2% in October (previously reported: 3.7%) to 3.5% in November. According to the Economic Outlook for 2012 released on 9 December, the Central Bank confirmed its 4.0% end-of-year inflation forecast for 2011. The Central Bank sees inflation ending 2012 at 3.3%, down from a previously forecasted 3.4%.
Author: Armando Ciccarelli, Head of Data Solutions