[Weekly Outlook] Will Inflation Rate Rise to 3% Range for the First Time in 10 Years?... Statistics Korea to Announce on July 2

Customers are shopping at a large supermarket in Seoul. Photo by Jinhyung Kang aymsdream@

[Sejong=Asia Economy Reporter Son Sunhee] Next week, the consumer price trend report showing the price flow for the entire month of October will be released. Due to factors such as international oil prices surpassing the $80 range, the inflation rate is expected to record a 3% increase for the first time in about 10 years.

The Statistics Korea will announce the 'October Consumer Price Trend' on the 2nd of next month. Following a 2.5% (month-on-month) increase in September, the government expects the rate of increase to expand further. If the October consumer price inflation rate reaches the 3% range, it will be the first time in about 10 years since February 2012 (3.0%).

Last October's telecommunications fee support will act as a base effect in October this year, leading to a higher inflation rate. Additionally, external conditions such as global supply chain disruptions and rising international oil prices are intensifying global inflationary pressures, which are also affecting inflation. If this trend continues through November and December, the annual inflation rate is expected to record the mid-2% range.

The Bank of Korea will announce the preliminary figures for the 'September Balance of Payments' on the 5th of next month. Up to August, the current account balance maintained a surplus trend for 16 consecutive months, supported by favorable transportation balances. However, in the case of the goods balance, imports increased faster due to rising raw material prices, reducing the August surplus by nearly $1.5 billion compared to the same month last year. Attention is focused on whether the surplus in the goods balance further decreased in September amid continued strong oil and raw material prices.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, who is scheduled to visit the UK to attend the 26th United Nations Climate Change Conference of the Parties (COP26), will take this opportunity to hold a Korean economic briefing for overseas investors in London, UK, on the 1st of next month.

This will be the first face-to-face briefing in about two years since the economic briefing held in New York in October 2019. Senior executives in charge of investment strategy and management from leading global investment banks and asset management firms based in London are expected to attend.

Through this briefing, Deputy Prime Minister Hong will explain the current status of the Korean economy, economic recovery achievements, and efforts for COVID-19 and mid- to long-term policy responses. He also plans to actively respond to the interests and concerns of overseas investors.

On the 2nd of next month, he is scheduled to visit the international credit rating agency Moody's for a meeting with senior officials including Marie Dillon, Head of Sovereign Credit Ratings for Asia-Pacific, Central Asia, and Africa.