[Weekly Outlook] Peak of High Inflation?… Consumer Price Index Announcement on the 2nd of Next Month

Customers are shopping at the Nonghyup Hanaro Club Yangjae branch in Seocho-gu, Seoul, amid continued economic slowdown and high inflation. Photo by Jinhyung Kang aymsdream@

[Asia Economy Sejong=Reporter Son Seon-hee] Amid rapidly rising inflation this year, Statistics Korea will announce the consumer price trends for October on the 2nd of next month. Attention is focused on this as the government had previously predicted that the inflation rate in October would reach its 'peak.'

The consumer price inflation rate slowed for two consecutive months after rising 6.3% in July, with 5.7% in August and 5.6% in September. The government initially expected October to be the turning point for slowing inflation growth, but there is speculation that July may have already been the peak. However, given the significant variables such as last month's public utility fee hikes and exchange rates, uncertainty has greatly increased.

Alongside this, Statistics Korea will release the industrial activity trends on the 31st. Attention is on whether domestic industrial production has declined for three consecutive months amid a 'complex economic crisis' caused by domestic and international uncertainties.

The Bank of Korea will announce the 'foreign exchange reserves as of the end of October' on the 2nd. There is interest in whether the recent trend of declining foreign exchange reserves has continued. Previously, in September, to curb the sharp rise in the won-dollar exchange rate, foreign exchange authorities released dollars into the market, causing foreign exchange reserves to drop by nearly 20 billion dollars within a month.

However, since the exchange rate was relatively stable this month, it is expected that foreign exchange reserves are less likely to have sharply decreased.

On the 1st of next month, the minutes of the Monetary Policy Committee meeting held on the 12th will be released. The background of the big step (a 0.50 percentage point increase in the base interest rate) decision and the rationale of the minority opinions opposing it can also be confirmed.