[Weekly Outlook] Inflation 'Peak'? Focus on Whether Expected Inflation Falls for Two Consecutive Months

[Asia Economy Sejong=Reporter Son Seonhee] The Bank of Korea will announce the results of the 'September Consumer Sentiment Survey' on the 27th. Attention is focused on whether the downward trend will continue for two consecutive months after expected inflation fell for the first time in seven months last month.

According to the Bank of Korea, expected inflation in August fell by 0.4 percentage points compared to the previous month. If it continues to decline for two consecutive months including this month, expectations will grow that the recently soaring inflation rate has finally reached its peak.

On the 29th, the 'September Business Survey Index (BSI)' will be announced. Last month, the BSI for all industries rose by 1 point compared to the previous month, mainly in non-manufacturing sectors such as services. This indicates that corporate sentiment improved for the first time in four months due to the lifting of social distancing measures, and attention is focused on whether this trend will continue for two consecutive months.

The Ministry of Economy and Finance will announce the status of national tax revenue for August on the same day. From the beginning of this year to July, national tax revenue reached 261 trillion won, an increase of 37.3 trillion won compared to the same period last year. The execution rate of the supplementary budget stands at 65.8%, exceeding the average of the past five years by 1.5 percentage points.

In particular, corporate tax increased by 23.9 trillion won, marking the largest increase among all tax items. Along with corporate tax, the three major tax items?value-added tax and income tax?increased by 5.5 trillion won and 9.3 trillion won respectively.

Statistics Korea will announce the 'August Industrial Activity Trends' on the 30th. The market is paying close attention to how uncertainties surrounding the economic flow will manifest.

Previously, in July, production, consumption, and investment all decreased simultaneously, recording a 'triple decline' for the first time in three months. The government assessed that while the overall economic recovery trend continues, external uncertainties are increasing due to global inflation and tightening moves by major countries.