South Korea July consumer inflation slowest in 25 months

By Jihoon Lee

SEOUL (Reuters) – South Korea’s consumer inflation cooled for a sixth consecutive month in July and by more than expected, official data showed on Wednesday.

The consumer price index stood 2.3% higher in July than a year earlier, after a 2.7% rise in June and compared with a median 2.4% increase forecast in a Reuters survey of economists.

It marked the weakest annual increase since June 2021, according to Statistics Korea, and was the second straight month the consumer price data came in lower than market expectations.

On a monthly basis, the index rose 0.1%, picking up from no change the previous month, but it was also weaker than a 0.2% rise expected by economists.

Broken down by sector, prices of petroleum products were 0.7% lower than the month before, but agricultural prices jumped 4.7%, the biggest in six months, while public utility prices dropped 4.9%.

There were heavy rains in mid-July, disrupting agricultural supplies and causing upward price pressures on some items.

Core inflation, which excludes volatile food and energy prices, slowed to 3.3% on an annual basis from 3.5% the previous month and hit the slowest rise since April 2022.

Last month, South Korea’s central bank extended its pause in its tightening cycle to a fourth straight meeting, after the last interest rate hike in January, but said it would maintain a tight stance amid still high prices.

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