Bank of Korea Holds Inflation Situation Review Meeting
"September Consumer Prices in 1% Range... Due to Oil Price Decline"
"Year-End Expected to Fluctuate Around 2%"
On the 2nd, the Bank of Korea commented on the consumer price inflation rate falling to 1.6% last month, marking the lowest increase in 3 years and 7 months, stating that "the sharp decline in international oil prices contributed to the decrease in the September consumer price inflation rate," but also noted that "there is significant uncertainty in oil prices depending on the developments of the Middle East situation."
Kim Woong, Deputy Governor of the Bank of Korea, made these remarks during a 'Price Situation Review Meeting' held that morning.
Earlier, Statistics Korea announced the 'September 2024 Consumer Price Trends,' reporting that the consumer price index last month rose by 1.6% compared to the same month last year. This is the lowest increase since February 2021 (1.4%), marking the smallest rise in 3 years and 7 months. It is also the first time since March 2021 (1.9%) that inflation has entered the 1% range. The consumer price inflation rate had maintained a 2% range for five consecutive months since April (2.9%).
Deputy Governor Kim evaluated this by saying, "The consumer price inflation rate has dropped to the 1% range, and the core inflation rate continues to stabilize around 2%, laying the foundation for price stability."
He explained that the decline in the September consumer price inflation rate mainly stems from supply-side factors such as the sharp drop in international oil prices. In fact, of the 0.42 percentage point decrease in the September consumer price inflation rate, the fall in petroleum product prices accounted for 0.33 percentage points, contributing about 80%.
Prices are expected to fluctuate around the 2% level toward the end of the year. Deputy Governor Kim said, "The consumer price inflation rate is expected to remain below 2% for the time being, then fluctuate around 2% toward the end of the year due to base effects," but added, "However, there is significant uncertainty in oil prices depending on the developments of the Middle East situation."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
