Wednesday, August 17, 2022

South Korean inflation growing at fastest pace since 1998

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South Korea’s consumer price inflation, CPI, increased in June, its fastest pace since 1998, adding pressure on the country’s apex bank to tighten its policy further, official data showed on Tuesday.

The consumer price index gained 6.0 per cent year-on-year in June, following a 5.4 per cent increase in May.

The Korean statistics agency reported that this was the fastest rate of growth since Nov. 1998, and exceeded the expected rate of 5.9 per cent.

Excluding food and energy, core consumer prices advanced to 3.9 per cent in June, following a 3.4 per cent rise in the preceeding month.

On a monthly basis, overall consumer prices rose 0.6 per cent in June, after a 0.7 per cent increase in the previous month.

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Prices had been expected to climb 0.5 per cent.

Core CPI increased 0.4 per cent monthly in June, after 0.5 per cent growth in the prior month.

Based on recently released data, the Bank of Korea is likely to deliver a 50-basis point hike in July, and then revert to 25-basis point hikes in August and October, Min Joo Kang, an ING economist said.

A total of 100 basis points of increases could stabilise inflation by the year-end, Min said.


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