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Korea: Inflation moderates in July
Latest reading: Inflation inched down to 2.1% in July from June’s 2.2%, matching market expectations and remaining broadly slightly above the Bank of Korea’s 2.0% inflation target. Looking at the details of the release, housing and utilities costs rose at a milder pace, and transportation prices fell as international oil prices subsided following the resolution of the Iran-Israel crisis. In contrast, food and non-alcoholic beverages prices rose at a quicker pace.
Annual average inflation remained at June’s 1.9% in July. Meanwhile, core inflation was unchanged, coming in at June’s 2.0% in July.
Lastly, consumer prices rose 0.18% from the previous month in July, accelerating from June’s 0.03% increase. July’s result marked the highest reading since March.
Panelist insight: Commenting on the outlook, EIU analysts stated:
“The disinflationary trend in 2025 will be aided by milder imported inflation and a high comparison base. Sticky price growth in the service sector will prevent an abrupt fall in inflation, while the deepening of monetary policy easing will also help to put a floor under consumer demand. Occasional surges in food and energy prices, due to adverse weather conditions and heightened geopolitical tension, will continue to represent an upside risk factor for inflation.”
