South Korea’s inflation softened notably to the bottom in additional than three years in August, including possibilities of an rate of interest minimize as quickly as subsequent month.
Client worth inflation softened to 2.0 p.c in August from 2.6 p.c in July, Statistics Korea reported Tuesday.
The speed got here according to expectations and hit the weakest degree since March 2021, when the speed was 1.9 p.c.
Core inflation that excludes costs of meals and vitality, slowed barely to 2.1 p.c in August from 2.2 p.c a month in the past. The speed fell to the bottom since November 2021.
On a month-to-month foundation, the buyer worth index gained 0.4 p.c following a 0.3 p.c rise. Economists had forecast costs to develop once more by 0.3 p.c.
With inflation trending down towards the central financial institution’s goal vary, the probability of an October minimize has elevated, economists at ING mentioned.
“Nonetheless, the reacceleration of mortgages and home costs in Seoul is prone to stay a major drag and even with an October minimize, we don’t count on the BoK to ship additional cuts till early subsequent yr,” they mentioned.
Final month, the Financial institution of Korea had saved its key rate of interest unchanged for the thirteenth consecutive assembly at a 15-year excessive of three.50 p.c.
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