Why are South Korean consumer prices rising?

Consumer prices in South Korea are rising due to increased costs for food and services, influenced by weather and a weaker currency.

Will the Bank of Korea cut interest rates soon?

The Bank of Korea is likely to hold interest rates at their current level for longer, with expectations of only one more cut next year.

What is the current inflation rate in South Korea?

South Korea's consumer price index rose 2.4% in November compared to the previous year.

Home / Business and Economy / South Korea Inflation Stays Hot: Interest Rates on Hold

South Korea Inflation Stays Hot: Interest Rates on Hold

2 Dec, 2025

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Summary

Consumer prices in South Korea rose 2.4% in November year-on-year.
Higher food and services costs are driving persistent inflation.
Bank of Korea is expected to maintain current interest rates.

South Korea Inflation Stays Hot: Interest Rates on Hold

South Korea is grappling with persistent inflation, as consumer prices climbed 2.4% in November compared to the previous year. This rise has kept inflation above the Bank of Korea's (BOK) 2% target for three consecutive months. The primary drivers identified are significant increases in the costs of food and essential services.

Prices for agricultural and fishery products alone jumped 5.6% year-on-year, with fresh produce like rice and mandarins experiencing substantial hikes. Finance Minister Koo Yun-cheol attributed these elevated prices to a combination of factors, including unfavorable weather conditions like frequent rain and the depreciating won, which also impacts petroleum product costs.

In light of these inflationary pressures and a weakening currency, the BOK opted to maintain its benchmark interest rate at 2.50% for the fourth consecutive meeting. Analysts now anticipate only one more rate cut in the first quarter of the upcoming year, followed by an extended period of stable rates.