Choo Kyung-ho: "Inflation in the Second Half Expected to Stay in the Mid-to-High 2% Range"

'2023 Second Half Economic Policy Direction' Briefing
"July Inflation May Fall Below Mid-2%"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho forecasted that inflation will stabilize in the second half of the year, remaining in the high 2% range on average.

Deputy Prime Minister Choo made these remarks on the 4th at 2 p.m. during the joint briefing on the 2023 second half economic policy direction held at the Government Seoul Office.

Choo said, "Consumer prices, which rose to 6.3% last year, fell to 2.7% in June this year, marking a drop to the 2% range for the first time in 21 months. The living cost index, which reflects perceived inflation, also recorded its lowest at 2.3% in 27 months, clearly showing a slowdown in the inflation trend. Unless there are special external or unexpected factors, inflation is expected to remain in the mid to high 2% range in the second half."

He also predicted that inflation could temporarily fall below the mid-2% range this month if there are no unusual weather anomalies. He added, "In August, there may be some difficulties in agricultural supply due to typical typhoons or heatwaves, and in September, aside from temporary price increases caused by holiday demand, stable inflation is expected to continue."

Furthermore, he predicted that economic growth in the second half of this year will rebound to about twice the level of the first half. Deputy Prime Minister Choo stated, "Although the growth rate for this year is expected to be 1.4%, lower than initially forecast due to poor performance in the first half, it is projected to rebound to about twice that level in the second half, supported by recovery in the IT sector. The improvement trend, including record-high foreign investment attraction and a shift to a trade surplus, is expected to become increasingly evident as the year progresses."