March Consumer Price Inflation Rate at 2.1%... Bank of Korea Holds Inflation Review Meeting
Kim Woong, Deputy Governor: "Stabilization Around Target Level (2.0%) Expected"
High Uncertainty in Exchange Rate, Oil Prices, and Domestic Demand Trends Requires Monitoring
"Uncertainties related to exchange rate and oil price movements, as well as domestic demand trends, remain high. We will closely monitor the future inflation situation."
Kim Woong, Deputy Governor of the Bank of Korea, stated at the inflation situation review meeting held on the 2nd, "The future consumer price inflation rate is expected to stabilize around the target level (2.0%)," but added that inflation-related uncertainties will be carefully monitored. The expectation that inflation will move near the target level is based on the view that core inflation will continue its rise in the high 1% range, with a high exchange rate acting as an upward factor and low demand pressure acting as a downward factor, offsetting each other.
The consumer price inflation rate for March recorded 2.1%, slightly higher than the previous month's 2.0%. Deputy Governor Kim pointed out, "despite the slowdown in petroleum product price increases, this result came about due to rises in processed food prices and university tuition fees." Petroleum product prices saw their increase rate drop significantly from 6.3% to 2.8% due to the decline in international oil prices, but processed foods expanded their increase rate from 2.9% to 3.6% due to price hikes in major food and beverage products. The core inflation rate slightly rose from 1.8% to 1.9% due to increases in university tuition fees.
According to the consumer price trends announced by Statistics Korea on the 2nd, the consumer price index for March was 116.29 (2020=100), up 2.1% compared to the same month last year. The consumer price inflation rate remained in the 1% range from September to December last year but has continued in the 2% range in the first quarter of this year, with 2.2% in January and 2.0% in February.
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