According to the latest data released by South Korea’s National Statistical Office, the country’s Consumer Price Index (CPI) shows a continued slowdown in inflation for the fourth consecutive month, suggesting that inflationary pressures in South Korea have reached their peak.
In May, the CPI rose by 3.3% on a year-on-year basis, indicating a deceleration from the 3.7% increase recorded in April.
The report highlights that utility service prices experienced a significant rebound of 23.2% in May, primarily driven by concerns over global energy supply disruptions arising from the Russo-Ukrainian war. South Korea, being heavily reliant on energy imports, felt the impact of these supply challenges.
On the other hand, prices of agricultural, fishery, and livestock products witnessed a slight decline of 0.3%. This decrease can be attributed to the stabilization of pork and beef prices, although prices for chicken and mackerel showed an upward trend.
Furthermore, there has been a notable decrease in diesel and gasoline prices, with reductions of 24% and 16.5% respectively. However, prices for services saw a moderate increase of 3.7%.
When considering the Core CPI, which excludes food and energy prices, the year-on-year increase stood at 3.9% in May. This reflects a slower pace compared to the 4% rise recorded in April.
The consecutive slowdown in South Korea’s CPI suggests that inflationary pressures are gradually easing, indicating that the country may have reached the peak of inflation. This could alleviate concerns about rising prices and provide relief to consumers and businesses alike.
Policymakers and economists will closely monitor future CPI data to assess the sustainability of this deceleration and its implications for monetary policy and economic stability. The gradual moderation in inflationary pressures may influence the central bank’s decision-making process and shape strategies aimed at fostering a balanced and sustainable economic growth trajectory.