South Korea consumer inflation softens to six-month low

A woman carrying meals on her head makes her way through shoppers at a traditional market in Seoul, South Korea, Jan 4, 2024. REUTERS/Kim Hong-Ji/File photo

SEOUL  -South Korea consumer inflation slowed to a six-month low in January, official data showed on Friday, coming in weaker than market expectations.

The consumer price index (CPI) stood 2.8 percent higher in January than the same month the year before, compared with a rise of 3.2 percent in December and 2.9 percent tipped in a Reuters poll of economists.

Inflation slowed for a third straight month, marking the slowest year-on-year rise since July 2023, mostly on a fall in oil prices, with petroleum products down 2.5 percent over the month.

READ: Bank of Korea extends rate pause as inflation cools

South Korea’s central bank in January suggested that it was done raising interest rates, but most board members saw monetary policy staying restrictive for some time to bring inflation down to its 2 percent target, citing uncertainty over supply-side pressures.

After the data release on Friday, Finance Minister Choi Sang-mok said inflation might rebound to around 3 percent in February and March as the recent geopolitical situation in the Middle East is driving up oil prices.

Core CPI, which excludes volatile food and energy items, rose 2.5 percent, weaker than a 2.8-percent rise in the previous month and the weakest since December 2021, according to Statistics Korea.