South Korea’s January inflation rises 2% year on year, in line with forecast

[SEOUL] South Korea’s consumer inflation eased to a five-month low in January, largely in line with market expectations, government data showed on Tuesday (Feb 3).

The consumer price index rose 2 per cent from a year earlier, compared with gains of 2.3 per cent in the previous month and a median 2.05 per cent increase tipped in a Reuters poll of economists.

It marked the slowest year-on-year rise since August 2025, after four months above the central bank’s medium-term target of 2.0 per cent.

The Bank of Korea last month signalled an end to its current easing cycle after keeping interest rates unchanged, prioritising foreign exchange stability in its first policy meeting of the year amid a weak won.

The won has weakened 0.8 per cent against the dollar so far this year to 1,451.5 per dollar, after ending 2025 2.3 per cent higher on a series of policy measures rolled out in December to stabilise the currency.

Last month, CPI rose 0.4 per cent on a monthly basis, after rising 0.3 per cent in the previous month, also roughly matching the median forecast of a 0.44 per cent rise. Prices of petroleum products fell 2.5 per cent, while agricultural products rose 1.5 per cent.

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Core CPI, excluding volatile food and energy prices, was 2 per cent higher from a year earlier, rising at the same pace as in the previous month, according to the Ministry of Data and Statistics. REUTERS