BOK says inflation to ease in September but underlying pressures to persist

Inflation in September is expected to ease from the previous month as a base effect fades, but underlying price pressures will likely persist, particularly in core items, the central bank said Wednesday.

"In August, the consumer price index rose at a faster rate than the previous month due to a base effect resulting from discount programs by a telecommunications company last year," Bank of Korea Deputy Gov. Lee Ji-ho said during a meeting to review inflation trends.

"In September, consumer price growth is expected to be lower than in August as the base effect fades, but the underlying upward trend is expected to continue, particularly in core items."

Earlier in the day, government data showed that the country's consumer prices rose 3.1 percent in August from a year earlier as oil prices remained elevated.

Higher mobile service subscription charges also contributed to the increase, due to the base effect from large-scale discounts offered last year following a hacking incident.

The August figure marked a rebound from a 2.8 percent on year rise in July, following increases of 3.1 percent and 3.2 percent in May and June, respectively.

While the base effect is expected to ease headline inflation in September, underlying price pressures remained elevated in August.

Core inflation, which excludes volatile food and energy prices, advanced 3.4 percent on year in August, marking its highest level since it rose 3.8 percent in May 2023.

Yonhap