BOK: "Inflation Rate Slows in June-July... Core Inflation Exceeds Forecast"

[Image source=Yonhap News]

The Bank of Korea stated that the consumer price inflation rate in June slowed to the 2% range but is expected to rise again and fluctuate around 3% until the end of the year. In particular, although core inflation is showing a gradual slowing trend, it has exceeded the first half forecast, suggesting the possibility of somewhat surpassing the previous projection path.

On the morning of the 4th, the Bank of Korea held a 'Price Situation Review Meeting' chaired by Deputy Governor Kim Woong on the 16th floor conference room of the main building to review the recent price situation and future price trends, announcing these views.

Deputy Governor Kim Woong explained, "The consumer price inflation rate in June slowed to the 2% range as expected due to a significant base effect," adding, "The core inflation rate (excluding food and energy) also showed an expected expansion of the slowdown, with a mild easing of rent inflation and a reduction in the rise of personal service prices."

He also forecasted that the consumer price inflation rate in July would continue the slowing trend following June but would then rise again, fluctuating around 3% until the end of the year.

Deputy Governor Kim said, "While core inflation shows a gradual slowing trend, there is a possibility of somewhat exceeding the previous projection path," adding, "There is high uncertainty regarding the future inflation path related to trends in international oil prices, domestic and foreign economic conditions, and the degree of public utility fee adjustments."

In the revised economic outlook released last May, the Bank of Korea expected the core inflation rate to be 3.8% in the first half and 2.9% in the second half, resulting in an annual rate of 3.3%. However, since the first half recorded 3.9%, there is a possibility of an upward revision.