[Weekly Outlook] Will Consumer Price Inflation Surpass 6%... Focus Also on Economic Analysis

KDI Announces 'July Economic Trends' on the 7th

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kwon Haeyoung] This week, the main focus is on how much more South Korea's inflation, which recorded a 5% increase rate, has risen. Attention is also drawn to the judgment on the economic recovery trend by the state-run research institute, the Korea Development Institute (KDI).

According to Statistics Korea on the 3rd, the consumer price trend for June will be announced on the 5th. Interest is concentrated on whether the consumer price inflation rate, which recorded 5.4% in May, has surpassed the 6% level.

Earlier, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated on the 26th of last month, "We can expect to see a 6% inflation rate in June or July-August."

On the 7th, the Korea Development Institute (KDI) will release the economic trend for July. In the June economic trend report, KDI diagnosed that "recently, our economy shows signs of weakening economic recovery due to global supply chain disruptions and soaring raw material prices," using the expression 'weakening economic recovery' for the first time this year.

The Bank of Korea will release the 'Q1 Fund Flow' statistics on the 6th. It will provide information on how households, companies, and government assets were managed. Last year, stock investment amounts and borrowing reached record highs, but since domestic and international stock markets have been significantly sluggish this year, the changes will be a key point to watch.

The 'May International Balance of Payments (provisional)' will also be announced on the 7th. The current account turned to a deficit for the first time in two years due to rising raw material import prices and overlapping dividends in April. While a return to surplus is likely in May, the key issue is how much the surplus margin has decreased compared to a year ago.

The Ministry of Economy and Finance will hold a seminar on the 5th ahead of enacting a new Foreign Exchange Act. Discussions will be held to improve the complex procedures of foreign exchange transactions, such as the obligation to report capital transactions.