© Reuters. FILE PHOTO: A shopkeeper naps as she waits for patrons at a standard market in Seoul, South Korea, April 7, 2022. REUTERS/Kim Hong-Ji/File Picture
By Cynthia Kim and Jihoon Lee
SEOUL (Reuters) -South Korea’s inflation eased for the primary time in 4 months in November, bringing reduction to policymakers fearful about persistent inflation dangers as they plan to maintain their restrictive financial coverage in place for longer.
The Client Worth Index stood 3.3% greater than the identical month the yr earlier than, after an increase of three.8% in October, official information confirmed on Tuesday, slower than a median 3.7% rise tipped in a Reuters Survey.
The index fell 0.6% on a month-to-month foundation, marking its first fall since November 2022 and the sharpest drop since October 2020.
A core measure that excludes unstable parts together with gasoline and meals eased to three.0% in November, the slowest rise since March 2022.
“Compared to core inflation in the U.S. and Europe that seem to be still in the 4% to 5% range, (South Korea’s core inflation) seems to be far more stable,” stated Finance Minister Choo Kyung-ho at a coverage assembly in Seoul. “Considering this, we see inflation stabilizing in a steady manner going forward, unless we face some additional external shocks.”
The gentle slowdown comes primarily from an easing in costs of recent meals gadgets in addition to gasoline costs.
The Financial institution of Korea stored rates of interest regular at 3.50% final week at its remaining coverage assembly of the yr and signalled it might have to preserve rates of interest greater for longer to move off persistent inflation dangers.
Most economists see the BOK as having reached its peak fee and anticipate it to start out easing coverage from the third quarter of subsequent yr as cooling inflation makes restrictive borrowing prices troublesome to justify to the general public.
