South Korea Inflation Rate

Consumer inflation in South Korea was at 5 percent year-on-year in December of 2022, in line with expectations and remaining unchanged from the seven-month low from the prior month as lower energy prices and a slower economy drove price growth to steadily decline from the 6.3 percent peak in July. The BOK opted for a smaller 25 basis point rate hike to 3.25% in November after delivering a half-percentage point increase in October, as policymakers try to balance the fight against inflation with economic risks. The central bank has now lifted interest rates by a total of 275 basis points since August last year, and Governor Rhee Chang-Yong said they would continue to hike rates as needed “for some time” which he later clarified as a period of three months. On a monthly basis, the South Korean CPI rose by 0.2 percent, rebounding from the 0.1 percent decrease in November. Considering all of 2022, inflation averaged 5.1 percent, the highest since 1998.