On Tuesday, the Bank of Korea (BOK) released a survey that showed inflation expectations in South Korea stayed the same in August as they had been in July.
The survey revealed that the public anticipated a 3.3 percent increase in consumer prices over the next year, identical to the readings from May of last year. This is significant because an increase in inflation could lead to businesses raising prices and workers asking for higher wages, potentially creating a cycle of higher inflation.
The Consumer Price Index (CPI) in July was 2.3 percent higher than the same month last year, which was the lowest increase since June 2021. In June, the CPI fell below 3 percent for the first time since September 2021.
The BOK has kept its key interest rate at 3.5 percent for the last four months, and is likely to remain unchanged at this week’s rate-setting meeting.
The Composite Consumer Sentiment Index (CCSI) for August was 103.1, down from 103.2 in July, ending five consecutive months of growth. A CCSI reading of over 100 indicates that optimists outnumber pessimists.
In this file photo, a shopper browses products at a supermarket in Seoul on May 2, 2023. (Yonhap)