The Bank of Korea: "Inflation Will Continue a Moderate Deceleration Trend"

This Month's Inflation Up 3.2%... Down 0.1%p from November

The Bank of Korea stated, "Unless agricultural product prices stabilize and international oil prices do not rise significantly, the inflation rate is expected to continue a gradual deceleration trend."

On the 29th at 8:30 a.m., the Bank held a 'Price Situation Review Meeting' chaired by Deputy Governor Kim Woong in the 16th-floor conference room of the main building, where this was announced.

The inflation rate for December rose 3.2% compared to the same month last year. Core inflation, excluding food and energy, recorded 2.8%. Both figures decreased by 0.1 percentage points from November.

Although the rate of increase in agricultural product prices remained high, the decline in oil prices led to a wider drop in petroleum product prices. Core inflation continued its slowing trend, mainly driven by dining out and goods.

Compared to last month's increase (3.3%), agricultural products (+0.04 percentage points) acted as an upward factor, while core (-0.08 percentage points) and processed foods (-0.07 percentage points) served as downward factors. In the case of agricultural product prices, the rise was mainly due to poor harvests caused by adverse weather conditions, expanding the increase particularly in fruits and vegetables.

Deputy Governor Kim explained, "There is significant uncertainty regarding the future inflation outlook, related to trends in oil and agricultural product prices, domestic and international economic conditions, and the impact of accumulated cost pressures."

[Image source=Yonhap News]