Consumer prices climbed 2.8 percent year-on-year in October, easing marginally from the 2.9 percent rate recorded in September. The print tracked closely with market projections but still sits notably above the Bank of Korea's official 2.0 percent inflation target. To curb these lingering price pressures, consensus expectations point toward consecutive rate hikes scheduled for November and early 2027 to reach a terminal policy rate of 3.50 percent.
Key points
Headline inflation continues to exceed the Bank of Korea's official 2.0 percent target de…: Headline inflation continues to exceed the Bank of Korea's official 2.0 percent target despite recent softening.
Elevated global energy costs and rising household borrowing are driving expectations for…: Elevated global energy costs and rising household borrowing are driving expectations for further monetary policy tightening.
Consensus projections indicate the central bank's policy rate will peak at 3.50 percent f…: Consensus projections indicate the central bank's policy rate will peak at 3.50 percent following projected increases.
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SEOUL, Nov 3 : South Korea's headline inflation slowed in October, government data showed on Tuesday, providing a slight reprieve for central bankers but remaining firmly above target.
Consumer prices rose 2.8 per cent year-on-year in October, down from a 2.9 per cent gain in September and nearly matching a 2.85 per cent increase forecast in a Reuters poll of economists.
The consumer price index rose 0.2 per cent on a monthly basis after gaining 0.3 per cent in the previous month, the data showed.
While the slower growth offers the Bank of Korea a brief respite, inflation remains well above its 2.0 per cent target.
Amid elevated global energy prices and rising household borrowing, the BOK is widely expected to hike rates in the coming months, maintaining its tight monetary posture to calm persistent inflationary pressures in Asia’s fourth-largest economy.
A separate poll showed consensus forecasts put the peak policy interest rate at 3.50 per cent, which prices in one more hike this November and another in the first quarter of 2027.
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