The Bank of Korea: "June Inflation Downward Trend Positive, Slowdown to Continue"

Bank of Korea Inflation Situation Review Meeting
Recent Inflation Rise Clearly Slows Down

A customer is purchasing apples at Hanaro Mart Yangjae Branch in Seocho-gu, Seoul. Photo by Jinhyung Kang aymsdream@

The Bank of Korea stated that the consumer price index (CPI) inflation rate showed a downward trend last month as expected and forecasted that the deceleration trend will continue.

On the morning of the 2nd, the Bank of Korea held a 'Price Situation Review Meeting' at its headquarters in Jung-gu, Seoul, chaired by Deputy Governor Kim Woong, and made this assessment regarding the June CPI released that day.

According to Statistics Korea, the June consumer price inflation rate was 2.4% year-on-year, marking a decline for the third consecutive month. This is the lowest inflation rate in 11 months since July last year (2.4%).

Although the rise in petroleum prices expanded, the inflation rate of agricultural products significantly slowed down, and the base effect from last year's electricity and city gas rate hikes also played a role.

The core inflation index, which shows the underlying trend of prices, saw its rate of increase slow down to the low 2% range. The index excluding agricultural products and petroleum in June rose 2.0% compared to the same month last year. The OECD method core inflation indicator, excluding food and energy, increased by 2.2%.

The inflation rate for living expenses in June was 2.8% year-on-year, falling into the 2% range for the first time since August last year.

Deputy Governor Kim said, "The core inflation rate maintained a stable trend at the low 2% level," adding, "It is positive that the consumer price inflation rate also showed a downward trend as expected, falling to the mid-2% range."

He continued, "Although the consumer price inflation rate may temporarily pause its deceleration due to recent oil price increases, considering the downward stabilization of core inflation and the base effects from the sharp rise in oil and agricultural product prices in August last year, the overall deceleration trend is expected to continue."