South Korea Inflation Exceeds Forecast in March

South Korea’s annual inflation rate eased to 2% in January 2026 from 2.3% in December, extending its slowdown for a second straight month and marking the lowest reading since August. The figure broadly matched market expectations and the central bank’s target, as softer fuel prices and favorable base effects helped curb price pressures. Last month, the Bank of Korea held its policy rate at 2.5% and removed language pointing to the possibility of further easing, though policymakers remain vigilant about currency volatility and the inflationary impact of a weak won. Price increases were strongest in miscellaneous goods & services (5%), food & non-alcoholic beverages (2.9%), furnishings, household equipment & routine maintenance (2.9%), restaurants & hotels (2.8%), and clothing & footwear (2.4%). On a monthly basis, consumer prices rose 0.4% in January, accelerating from 0.3% in December and in line with consensus forecasts.

South Korea’s annual inflation rate inched lower to 2.3% in December 2025 from 2.4% in the previous two months, marking the lowest level since September and aligning with market forecasts. However, the latest result remained above the central bank’s 2% target for a fourth straight month. Price growth eased for food & non-alcoholic beverages (3.6% vs 4.7% in November), furnishings, household equipment & routine maintenance (2.7% vs 2.8%), health (1.0% vs 1.1%), recreation & culture (1.2% vs 1.4%), and education (1.6% vs 1.7%). At the same time, the costs of alcohol and tobacco were flat after edging up 0.1% previously. Meanwhile, inflation held steady for clothing (at 2.3%), transport (at 3.2%), and communication (at 0.4%), but was higher for housing (1.3% vs 1.2%), restaurants & hotels (3.0% vs 2.9%), and miscellaneous goods & services (4.9% vs 4.2%). On a monthly basis, consumer prices increased 0.3%, reversing a 0.2% decline in November.

South Korea’s annual inflation rate held at 2.4% in November 2025, unchanged from the previous month and remaining at its highest level since July 2024. The latest figure also stayed above the central bank’s 2% target for a third straight month. Price continued to rise for all components: food & non-alcoholic beverages (4.7% vs 3.5% in October), tobacco (0.1% vs 0.4%), clothing (2.3% vs 2.1%), furnishings, household equipment & routine maintenance (2.8% vs 2.2%), housing (1.2% vs 1.1%), health (1.1% vs 0.9%), transport (3.2% vs 3.4%), communication (0.4% vs 0.4%), culture (1.4% vs 2.1%), education (1.7% vs 1.8%), restaurants & hotels (2.9% vs 3.2%), and miscellaneous goods & services (4.2% vs 4.3%). On a monthly basis, consumer prices declined 0.2%, swinging from a 0.3% rise in October and marking the first drop since August.