The Bank of Korea Expects Consumer Prices to Slow Down Again Starting in August

Bank of Korea to Hold Price Situation Review Meeting on the 2nd

The Bank of Korea announced on the 2nd that "going forward, the consumer price inflation rate is expected to show a decelerating trend again from August, as core inflation stabilizes downward and the base effects from last year's sharp rise in oil and agricultural product prices will also have a significant impact."

Kim Woong, Deputy Governor of the Bank of Korea, is answering questions from the press at a briefing on the status of inflation targeting held on the 18th at the Bank of Korea Annex in Seoul. Photo by Joint Press Corps

Kim Woong, Deputy Governor of the Bank of Korea, held a meeting on the morning of the same day to review the recent inflation situation and the future inflation trend.

Regarding the inflation rate in July, Deputy Governor Kim said, "The consumer price inflation rate (2.6%) slightly increased compared to the previous month (2.2%) as non-core prices such as petroleum products rose, although core inflation remained at the previous month's level. Petroleum prices increased due to rising international oil prices and a reduction in the oil tax cut, while agricultural product prices rose for some vegetables due to concentrated heavy rains, but other items continued to show a decelerating trend."

He added, "The consumer price inflation rate rose slightly as expected, influenced by the rise in oil prices similar to major countries and temporary factors such as domestic heavy rains. Core inflation continues to maintain a stable trend at the low 2% level."

Regarding the future inflation trend, he said, "With core inflation stabilizing downward, from August, the base effects from last year's sharp rise in oil and agricultural product prices will also have a significant impact, leading to a decelerating trend again. However, uncertainties remain due to worsening Middle East tensions, weather conditions, and exchange rate trends, so during the August economic outlook, we plan to closely examine future inflation conditions and present a quarterly forecast path."