Home / Business and Economy / S. Korea Inflation Cools to 3-Month Low on Falling Oil Prices
S. Korea Inflation Cools to 3-Month Low on Falling Oil Prices
4 Aug
Summary
- South Korea's consumer inflation hit a three-month low in July.
- Prices fell 0.2% month-on-month due to a 5.5% drop in petroleum products.
- Policymakers remain watchful for persistent upward price pressures.
South Korea's consumer inflation eased to a three-month low of 2.8% in July, a decrease from June's 3.2% and below economists' projections. This slowdown was significantly influenced by a 5.5% drop in petroleum product prices, resulting in a 0.2% monthly decline in the consumer price index.
This monthly fall marked the first such occurrence in eight months. However, Vice Finance Minister Lee Hyoung-il cautioned that upward price pressures persist, citing Middle East war uncertainties. The finance ministry also noted that nationwide fuel price caps reduced July's inflation by an estimated 0.3 percentage points.
Looking ahead, a one-off factor related to last year's temporary mobile fee discounts is expected to increase inflation by 0.8 percentage points in August due to base effects. Meanwhile, core CPI, excluding volatile food and energy prices, saw its largest rise since December 2023, increasing to 2.6% in July.
