South Korea inflation hits 11-month low as supply pressures ease
2024.07.01 19:47
SEOUL (Reuters) – South Korea’s consumer inflation weakened more than expected to an 11-month low in June as supply-side pressures eased, official data showed on Tuesday.
The consumer price index (CPI) rose 2.4% higher in June from a year earlier, slower than the 2.7% rise in May and the weakest since July 2023, according to Statistics Korea.
It was also well below the median 2.7% rise tipped in a Reuters survey of economists.
The index fell 0.2% on a monthly basis, after a 0.1% rise in the previous month, marking the first decline in seven months.
By product, prices of agricultural goods fell 5.3% over the month while petroleum goods lost 2.9%, dragging the index lower.
South Korea’s central bank governor said last month the pace of consumer inflation is likely to continue to slow, feeding expectations the Bank of Korea will start cutting interest rates towards the end of this year.
The central bank, which targets medium-term inflation of 2%, extended its interest rate pause for an 11th straight meeting in May. The bank next meets on July 11.
The core CPI, excluding volatile food and energy items, was 2.2% higher in June than a year before, in line with May.
