South Korea’s National Bureau of Statistics reported that the consumer price index (CPI) rose 6% in June from a year earlier. This was the highest level in almost 24 years as energy and food costs rose.
South Korea’s CPI rose faster in June than in May (5.4%).
It was also the 15th consecutive month that the CPI was above the central bank’s 2% inflation target in June.
If the CPI continues this upward trend, the full-year CPI for 2022 will likely be above the Treasury’s forecast of 5.7%.
The increase in CPI reflects that South Korea continues to face inflationary pressures. The Bank of Korea raised its key interest rate from 0.25% to 1.75% at its May 26 meeting, the first two-month rate hike in nearly 15 years.
The South Korean government has made great efforts to curb rising inflation as prices for oil and other commodities have increased.
South Korea’s central bank has made inflation a top priority, despite concerns that a rate hike could increase borrowing costs and hurt the economy.
The next meeting of the Bank of Korea will be held on July 13.