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South Korea’s Inflation Eases as Rate Hikes Cool Demand

  • Central bank has been tightening policy since August last year
  • Bank of Korea to debate another outsized hike as Fed tightens
Inflation has been fueled this year by a jump in consumer demand for dining and travel as the grip of the pandemic eased on the economy.

Inflation has been fueled this year by a jump in consumer demand for dining and travel as the grip of the pandemic eased on the economy.

Photographer: Woohae Cho/Bloomberg
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South Korean inflation slowed a touch in September in a sign that policy tightening is beginning to weigh on demand, a result that’s likely to intensify debate over whether to deliver an outsized interest-rate increase next week.

Consumer prices advanced 5.6% from a year earlier, easing from August’s 5.7% that was also economists’ median estimate, statistics office data showed Wednesday. The Bank of Korea is under pressure to raise rates by a half percentage-point to bridge a gap that’s opened up with the Federal Reserve.