Bank of Korea forecasts October inflation near 3%

The Bank of Korea reported that while September's consumer price inflation rate decreased to 2.9% from August's 3.1%, the underlying inflationary trend has actually expanded when accounting for the expiration of temporary base effects. Specifically, the previous month's figures were influenced by significant discounts on mobile phone fees.

Deputy Governor Lee Ji-ho noted that core inflation remains pressured by rising costs in personal services, such as airfares and travel expenses. Additionally, the price of durable goods, including electronics, has seen an increased rate of growth due to rising semiconductor prices. Durable goods inflation rose from 3.9% in July to 4.9% in September.

The Bank forecasts that consumer inflation will remain at a high level of around 3% in October. Officials expressed caution regarding future price stability, citing uncertainties related to conflicts in the Middle East, potential cost shocks, and increasing demand-side pressures.