Bank of Korea Expects Price Stabilization Measures to Take Effect

The Bank of Korea (BOK) forecast that the consumer inflation rate in July could somewhat decrease thanks to falling international oil prices and the government's price stabilization efforts. However, the central bank added that increased demand from economic recovery could act as a factor for high inflation to persist for the time being. Lee Ji-ho, BOK Deputy Governor, presented this analysis and explained that the effect of falling international oil prices in curbing inflation and the increased demand due to economic recovery would influence each other.

The consumer price index in June rose 3.2% year-on-year. The cost of living index recorded a 3.4% increase, indicating a significant burden on households, especially vulnerable groups.

The Bank of Korea plans to closely monitor the price situation with caution regarding the possibility of sustained high inflation in core prices.