In November, South Korea's inflation rate remained below 2% for the third consecutive month, reflecting economic dynamics that analysts are closely monitoring. The consumer price index recorded a 1.5% rise year on year, as reported by Statistics Korea on Tuesday. While this marks an increase from October's 1.3% growth, it fell short of market expectations, which anticipated a 1.7% uptick. Core inflation, which excludes food and energy, saw a year-on-year increase of 1.9% in November, slightly higher than the 1.8% recorded in October and in line with market predictions.
ING analysts expressed that the month-on-month decrease in core inflation was largely due to significant stabilization in fresh food prices, tempered by rising gas prices as reductions in fuel taxes came to an end. Moreover, the newly released data indicates a noticeable slowdown in export momentum, with domestic economic activity remaining considerably subdued.
Looking ahead, ING has projected that South Korea's central bank might initiate additional rate cuts, forecasting a potential trimming of 50 basis points in the fourth quarter's interest rate, in response to these persistent economic challenges..