SEOUL (Reuters) -South Korea’s consumer inflation slowed in August to the weakest in nearly 3-1/2 years, official data showed on Tuesday, supporting market expectations for an imminent easing of monetary policy.
The consumer price index rose 2.0% from a year earlier, after rising 2.6% the previous month, marking the slowest annual rise since March 2021.
It matched the median 2.0% increase tipped in a Reuters survey of economists and the central bank’s medium-term inflation target of 2%.
On a monthly basis, the index was up 0.4%, the fastest in six months, after rising 0.3% in the prior month and beating forecast by economists for 0.3%.
“Going forward, unless there is any additional shock from weather conditions or global oil prices, consumer inflation is expected to stabilise in the lower 2% range,” said Vice Finance Minister Kim Beom-seok.
Last month, the Bank of Korea held interest rates steady at their highest in nearly 16 years but revived expectations for a policy easing that some economists see happening as soon as October as growth concerns overshadow inflation worries.
Core CPI, excluding volatile food and energy items, rose 2.1% from a year earlier, slowing from the previous month’s 2.2% rise and marking the weakest since November 2021.
(Reporting by Jihoon Lee; Editing by Jamie Freed and Tom Hogue)
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