Bank of Korea: "Consumer Price Inflation Rate Expected to Stabilize Around 2% at Year-End and Early Next Year"

Lower Oil Prices and Slowdown in Travel Service Costs

"Although the consumer price inflation rate rose more sharply in October, it is expected to stabilize again around 2% toward the end of the year and early next year."

Kim Woong, Deputy Governor of the Bank of Korea. Yonhap News Agency

Kim Woong, Deputy Governor of the Bank of Korea, stated this at a price situation review meeting held at the Bank of Korea headquarters in Jung-gu, Seoul, on November 4. He explained, "The October consumer price index increased more than expected due to higher agricultural product prices and a surge in both domestic and foreign travel demand around the long Chuseok holiday, which drove up travel-related service prices." Looking ahead, he projected that the consumer price inflation rate will stabilize again around 2% at the end of the year and the beginning of next year, considering the lower oil prices compared to last year and an expected slowdown in travel service prices. Last November and December, Dubai crude oil was priced at $73.1 per barrel, but it is now trading around $65 per barrel.

However, given the recent high volatility in exchange rates and oil prices, the Bank of Korea plans to review and announce a more detailed inflation outlook in its November forecast.

According to the 'October Consumer Price Trends' released by the National Data Office on the same day, last month's consumer price index stood at 117.42 (2020=100), up 2.4% from the same period last year. This is the highest increase in one year and three months since July 2022 (2.6%). The core inflation rate rose by 2.2%, mainly due to a significant increase in both domestic and foreign travel demand during the long Chuseok holiday and the Asia-Pacific Economic Cooperation (APEC) summit, which led to higher prices for personal services such as travel and accommodation.