Lee Ji-ho, Deputy Governor of the Bank of Korea. Yonhap News
The Bank of Korea said on the 2nd that September consumer price inflation will come in below August’s reading, but that underlying price pressures will persist, led by core items.
Lee Ji-ho, deputy governor of the Bank of Korea, made the remarks while presiding over a price review meeting that morning.
Statistics Korea reported the same day that consumer prices rose 3.1% in August from a year earlier. The rate had fallen to 2.8% in July from 3.2% in June before climbing back above 3%.
“The increase widened from July because of base effects from telecommunications fee discounts last year,” the deputy governor said. “Cuts to the price ceiling on petroleum products and the government’s discount programs for agricultural, livestock and fisheries products limited the gain.”
Core inflation “accelerated sharply as gains in durable goods prices widened and base effects weighed heavily,” the deputy governor added. Core inflation was 3.4% in August, up 0.8 percentage points from 2.6% in July.
“Going forward, consumer prices will keep rising at a high pace, led by core inflation, as cost shocks pass through and demand-side pressures build, with uncertainty over the war in the Middle East still elevated,” the deputy governor said.