(CTN News) – Official statistics that were released on Tuesday revealed that South Korea’s consumer inflation slowed down for the second consecutive month in May, reaching a 10-month low.
This was the case for the second consecutive month. The slowdown occurred for the second month in a row, making this the second consecutive month. The market had anticipated a substantially higher result, but this one turned out to be significantly lower.
The consumer price index (CPI) for the month of May showed a rise of 2.7% when compared to the same month in the previous year.
This increase was less than the 2.9% increase that occurred in April and the 2.8% gain that was expected by a survey of economists that was done by Reuters. Both of these increases represent increases in the market. In comparison to the present growth, both of these increases were significantly higher.
Inflation was the slowest it’s ever been since July.
This was the highest it had ever been. According to the numbers that were provided by Numbers Korea, there was a month in which there was no change, and then there was a month in which the index increased by 0.1% on a monthly basis at the end of the month. This represents a considerable departure from the 0.2% increase that economists had anticipated, which is a big deviation.
Over the course of the month, there was a decrease of 2.5% in the prices of agricultural products, while there was an increase of 0.3% in the prices of petroleum products and a 0.4% increase in the costs of personal services. There was also a rise of 0.4% in the prices of personal services.
The Minister of Finance, Choi Sang-mok, has claimed that “inflation is expected to stabilise in the lower to mid-2% range in the second half.” His statement was made in reference to the second half of the year.
In addition to this, he pledged to continue the reduction in tariffs that are placed on food products and to avoid from raising the rates that are charged by public utilities in order to bring inflation under control.
In a statement that was released in May, the Bank of Korea (BOK) indicated that it is highly likely that consumer inflation will continue to decline at a sluggish pace.
The predictions that were made at the time were accurate in this regard. Nevertheless, the BOK emphasized that it was of the utmost importance to keep a close check on whether or not inflation was getting closer to the target of 2% that had been established by the financial institution.
Central bank forecasts indicated a slowing of inflation this year,
Despite the fact that economic development was showing signs of improvement. This occurred as a result of the perception that domestic demand was only marginally rebounding, which was the driving force behind the projection. This prediction was taken into consideration during the month prior.
During the month of May, the Bank of Korea (BOK) made the decision to maintain interest rates at their current level for the eleventh consecutive meeting. According to a study that was conducted by Reuters in the month of May, it is anticipated that the Bank of Korea (BOK) will reduce its policy rate by fifty Inflation basis points, bringing it down to three percent in the fourth quarter of 2024. This announcement was made following the conclusion of the study.
An increase of 2.2% was observed in the core consumer price index (CPI) when compared to the previous year. This index does not include volatile categories such as groceries and energy products, which are not included in the CPI.
This is the smallest growth that has occurred since December 2021, and it also represents a decline from the rise of 2.3% that occurred in the previous month. Additionally, this has been the case since December 2021.
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