Inflation in South Korea increased in November, yet failed to meet forecasts.
- In November, South Korea's inflation rate increased to 1.5%, marking a rise from a 45-month low in October. The country is facing challenges with a weakening Korean won and slowing exports.
- The figure was lower than the 1.7% expected by economists polled by Reuters, but higher than October's inflation reading of 1.3%.
- The Bank of Korea unexpectedly cut rates by 25 basis points to 3%, marking the first time the central bank has enacted two back-to-back cuts since 2009.
In November, South Korea's inflation rate increased to 1.5%, marking a rise from a 45-month low in October. The country is facing challenges with a weakening Korean won and slowing exports.
The figure was lower than the 1.7% expected by economists polled by Reuters, but higher than October's inflation reading of 1.3%.
The Bank of Korea unexpectedly cut rates by 25 basis points to 3%, marking the first time the central bank has enacted two back-to-back cuts since 2009.
The BOK stated that the cut was aimed at reducing the risks to the economy. Despite a slight growth of 0.1% in GDP in the third quarter, South Korea narrowly escaped a technical recession after experiencing a 0.2% contraction in the second quarter, according to the bank's estimates.
The BOK stated that prices have stabilized and are expected to remain stable due to declining global oil prices and subdued demand pressure regarding inflation.
The Bank of England (BOK) has revised its headline inflation forecasts for 2024 and 2025 to 2.3% and 1.9%, respectively, from its earlier predictions of 2.5% and 2.1%.
The bank stated that the future course of inflation will be influenced by fluctuations in exchange rates and global oil prices, as well as by economic growth in both domestic and foreign markets, and by changes in public utility fees.
Over October and November, South Korea's currency weakened against the greenback, reaching a two-year high of 1,411.31. This was due to tariff fears from the incoming Trump administration. According to data from the World Integrated Trade Solution platform, set up by the World Bank, the U.S. is South Korea's second largest trade partner.
Asia Economy
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