South Korea inflation cools to three-month low, but risks remain
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SEOUL, Aug 4 : South Korea’s consumer inflation softened to a three-month low in July, coming in below market expectations on a fall in oil prices, though policymakers remained wary of upward price pressures.
The consumer price index (CPI) rose 2.8 per cent in July from a year earlier, after rising 3.2 per cent in June, data from the Ministry of Data and Statistics showed on Tuesday. That was weaker than a median 3.0 per cent increase tipped in a Reuters poll of economists.
Over the month, the index fell for the first time in eight months, down 0.2 per cent, as prices of petroleum products dropped 5.5 per cent. Economists had expected a rise of 0.1 per cent, the same pace as in the previous month.
“Upward price pressures, including uncertainty over the Middle East war, persist,” Vice Finance Minister Lee Hyoung-il said.
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The finance ministry estimated that nationwide fuel price caps reduced inflation last month by 0.3 per centage points.
In August, there also will be a one-off factor raising inflation by 0.8 per centage points due to the base effects of temporary mobile fee discounts last year, according to the ministry.
Oil prices fell to three-week lows on Monday after U.S. President Donald Trump held off on a fresh attack on Iran in the hope of sealing a quick deal that could boost oil supplies from the Gulf.
The Bank of Korea raised interest rates last month for the first time in three-and-a-half years and flagged more to come, as brisk growth in Asia’s fourth-largest economy fanned inflation risks.
Core CPI, stripping off volatile food and energy prices, rose 2.6 per cent in July from a year earlier, after rising 2.5 per cent in June. It was the biggest rise since December 2023.
Source: Reuters
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