SEOUL, June 4 — South Korea’s consumer inflation slowed for a second straight month in May to a 10-month low, official data showed today, coming in lower than market expectations.
The consumer price index (CPI) in May stood 2.7 per cent higher than a year earlier, slower than a rise of 2.9 per cent in April and a gain of 2.8 per cent tipped in a Reuters survey of economists. It was the slowest annual increase since July.
The index rose 0.1 per cent on a monthly basis, according to Statistics Korea, after no change in April and compared with a 0.2 per cent rise expected by economists.
By product, prices of agricultural products fell 2.5 per cent over the month, but petroleum products rose 0.3 per cent and personal service prices gained 0.4 per cent.
“Inflation is expected to stabilise in the lower to mid-2 per cent range in the second half,” Finance Minister Choi Sang-mok said, vowing to extend tariff cuts on food ingredients and refrain from raising public utility prices to stabilise inflation.
The Bank of Korea (BOK) said consumer inflation would likely continue to ease gradually, as projected in May, but it needed to watch whether inflation converges on the central bank’s target of 2 per cent.
Last month, the central bank said inflation would likely be on a decelerating trend throughout the year despite stronger economic growth, because domestic demand was seen recovering only modestly.
The BOK, which held interest rates steady for an 11th straight meeting in May, is expected to lower its policy rate by 50 basis points to 3 per cent in the fourth quarter of this year, according to a Reuters poll in May.
Core CPI, excluding volatile food and energy items, rose 2.2 per cent year-on-year, slowing from a 2.3 per cent rise in the previous month and marking the slowest increase since December 2021.
— Reuters
