Bank of Korea Holds Inflation Situation Review Meeting
December Consumer Price Inflation Rate at 1.9%
"High Exchange Rate May Raise Inflation Rate Next Month"
The Bank of Korea evaluated on the 31st that this month's consumer price inflation rate recorded 1.9%, stating, "It rose to the high 1% range due to the base effect from the oil price decline at the end of last year and the previously elevated exchange rate impact," and added, "Next month's consumer price inflation rate may increase further due to the recent high exchange rate."
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 'Consumer Price Trends for December 2024' that morning, reporting that this month's consumer price index rose by 1.9% compared to the same month last year. The consumer price inflation rate had maintained the 1% range for four consecutive months.
Regarding this, Deputy Governor Kim evaluated, "The December consumer price inflation rate rose to the high 1% range as initially expected, due to the base effect from the oil price decline at the end of last year and the previously elevated exchange rate impact, and the core inflation rate continued a stable trend at the high 1% level."
He forecasted that next month's consumer price inflation rate could rise due to the high exchange rate. Deputy Governor Kim said, "Next month's consumer price inflation rate may increase further due to the recent high exchange rate," but also projected, "Thereafter, influenced by the base effects of oil and agricultural product prices and low demand pressure, the inflation rate will maintain a stable trend below 2% for the time being."
He added, "Given the increased uncertainties related to exchange rate movements, the impact of weakened consumer sentiment, and the timing of public utility fee hikes on the inflation forecast path, we will carefully monitor future price trends."
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