South Korea Inflation Hits 21-Month High

South Korea’s annual inflation rate climbed to 2.6% in April 2026, matching market forecasts and accelerating from 2.2% in the previous month. It marked the highest reading since July 2024, highlighting the deepening effects of higher oil prices amid the Middle East conflict. Prices increased faster mainly for housing and utilities (1.7% vs 1.5% in March), transport (9.7% vs 5%), and recreation and culture (3.4% vs 2.8%). Inflation also remained unchanged for clothing and footwear ( at 2.1%), communication (at 0.6%), and education (at 1.1%). On the other hand, price growth softened for food and non-alcoholic beverages (0.3% vs 0.5%), alcoholic beverages and tobacco (0.1% vs 0.6%), furnishings, household equipment & routine maintenance (1.9% vs 3.2%), and miscellaneous goods and services (4.1% vs 4.6%). On a monthly basis, consumer prices increased by 0.5%, the fastest rise since late September, in line with estimates and up from a 0.3% gain in the preceding period.

South Korea’s annual inflation rate rose to 2.2% in March 2026, up from 2.0% in the previous two months but less than market forecasts of 2.4%. It was the highest reading since December, breaching the central bank’s 2% target. Price growth accelerated for alcohol and tobacco (0.6% vs 0.4% in February), housing (1.5% vs 1.3%), furnishings, household equipment & routine maintenance (3.2% vs 2.9%), health (1.3% vs 1.1%), transport (5.0% vs 1.1%), communication (0.6% vs 0.4%), and recreation & culture (2.8% vs 0.9%). Meanwhile, the cost of food & non-alcoholic beverages increased at the mildest pace since February 2020 (0.5% vs 2.9%). Inflation also slowed for clothing (2.1% vs 2.4%), education (1.1% vs 1.5%), restaurants & hotels (2.7% vs 2.8%), and miscellaneous goods & services (4.6% vs 5.0%). On a monthly basis, consumer prices went up 0.3%, holding steady for the second straight month but falling short of estimates of 0.6%.

South Korea’s annual inflation rate held at 2% in February 2026, unchanged from January and slightly below market expectations of 2.1%. The latest reading remained in line with the central bank’s target, indicating that overall price pressures were largely contained before the Iran conflict triggered renewed volatility in global energy markets. The escalating Middle East conflict rattled financial markets and pushed energy prices sharply higher, stoking inflation concerns and prompting policymakers to reassess their outlooks. South Korea is particularly vulnerable to such shocks as it relies heavily on crude oil and natural gas imports from the Middle East. Last week, the Bank of Korea held its policy rate steady at 2.5% for a sixth consecutive meeting and raised its inflation outlook for this year to 2.2% from an earlier projection of 2.1%. On a monthly basis, consumer prices rose 0.3% in February, easing from a 0.4% increase in January which was also the consensus forecast.