South Korea inflation slows to 3-1/2-year low, hits central bank target

SOUTH Korea’s consumer inflation slowed in August to the weakest in nearly 3-1/2 years, official data showed on Tuesday, supporting market expectations for an imminent easing of monetary policy.

The consumer price index rose 2.0 per cent from a year earlier, after rising 2.6 per cent the previous month, marking the slowest annual rise since March 2021.

It matched the median 2.0 per cent increase tipped in a Reuters survey of economists and the central bank’s medium-term inflation target of 2 per cent.

On a monthly basis, the index was up 0.4 per cent, the fastest in six months, after rising 0.3 per cent in the prior month and beating forecast by economists for 0.3 per cent.

Last month, the Bank of Korea held interest rates steady at their highest in nearly 16 years but revived expectations for a policy easing that some economists see happening as soon as October as growth concerns overshadow inflation worries.

Core CPI, excluding volatile food and energy items, rose 2.1 per cent from a year earlier, slowing from the previous month’s 2.2 per cent rise and marking the weakest since November 2021. REUTERS