BOK-inflation forecast

BOK sees inflation slowing down to 2 pct late next year

SEOUL, Dec. 20 (Yonhap) -- South Korea's inflation will continue its downward trend, falling to 2 percent late next year, although its pace of decline will be slower than expected, the central bank said Wednesday.

In a report, the Bank of Korea (BOK) said consumer prices in Asia's fourth-largest economy are unlikely to show a sharp drop in inflation this month as was seen in November.

"November's inflation posted a significant drop due to a decline in oil prices and agricultural products, but such a sharp deceleration is unlikely down the road," it said.

"Consumer prices for December will be similar to those in November, or slower than the previous month, and its slowdown pace will continue to drop to 2 percent late next year," it added.

South Korea's inflation grew at a slower pace last month, though it stayed above 3 percent for the fourth consecutive month amid the high prices of energy and farm goods.

Consumer prices, a key gauge of inflation, rose 3.3 percent in November from a year earlier, compared with the 3.8 percent on-year increase the previous month, marking the first time in four months that the annual price growth has eased.

Last month, the BOK kept its key interest rate unchanged at 3.5 percent for the seventh straight time. The central bank delivered seven consecutive rate hikes from April 2022 to January 2023.

The central bank assessed that it is uncertain that inflation will be approaching its target level given uncertainties over a rise in public service fees and others.

Last month, the bank jacked up its inflation forecast for next year to 2.6 percent from its earlier estimate of 2.4 percent.

A possible rebound in oil prices, a rise in international farm goods caused by extreme weather and cost-push spillover effects will add upward pressure on inflation.

More specifically, a rise in utility costs, such as electricity and gas, will put more pressure on inflation, it added.





sam@yna.co.kr

(END)

주의사항

※본 리포트는 한국무역보험공사가 외부기관으로부터 획득한 자료를 인용한 것입니다.

※참고자료로만 활용하시기 바랍니다.