Bank of Korea: Consumer Inflation in October Expected to Remain High Around 3% with Core Prices Leading the Rise

Consumer, Core, and Living Price Inflation Rates Declined in September Compared to Previous Month

However, Upward Inflation Trend Expanded as Base Effect Dissipated

"On Alert for Cost Pass-Through and Increased Demand-Side Pressures"

"The consumer price inflation rate in October is also expected to remain high at around 3%, as the upward trend in core items continues."

On October 2, at the Bank of Korea headquarters in Jung-gu, Seoul, Bank of Korea Deputy Governor Lee Jiho presided over a meeting to review inflation trends. He stated, "Although consumer, core, and living price inflation rates in September were lower compared to the previous month, considering that last month's temporary base effect has now dissipated, the overall upward trend in inflation has somewhat expanded."

The consumer price index in September increased by 2.9% compared to the same month last year. Although this was lower than the previous month's figure of 3.1%, the previous month's number was affected by a temporary base effect from SK Telecom's 50% mobile phone fee discount in August last year, while that effect disappeared in September.

The year-on-year growth rate for petroleum product prices was 14.8%. Despite higher international oil prices due to renewed tensions in the Middle East, the price cap remained in effect, resulting in a trend similar to the previous month. The decline in prices for agricultural, livestock, and fishery products moderated to -0.3% in September, compared to a drop of -2.6% in the previous month, affected by poor harvest conditions for certain vegetables.

The core inflation rate was 2.8%, down from 3.4% in the previous month, as the base effect from telecommunications fees disappeared. The living price index also decreased to 2.5% from 3.2% in the previous month for the same reason. Deputy Governor Lee explained, "In core items, personal service prices, including airfare and travel expenses, continued to rise due to cost pressure pass-through." He added, "The rise in semiconductor prices has also widened the price increases in durable goods such as electronic products."

Deputy Governor Lee also stated, "Going forward, as uncertainties related to the war in the Middle East remain high, we expect the strong upward trend in core inflation to persist due to the pass-through of cost shocks and increased demand-side pressures. We will continue to monitor inflation with heightened vigilance."

This content was produced with the assistance of AI translation services.