South Korea Inflation Remains Above Target at 2.8% in October

Seoul, November 3 - South Korea's headline inflation moderated in October, according to government data released on Tuesday, offering a slight respite for central bankers but remaining significantly above the target. In October, consumer prices increased by 2.8% year-on-year, a slight decrease from the 2.9% gain in September and closely aligning with a 2.85% increase predicted by a Reuters poll of economists.

The consumer price index climbed by 0.2% on a month-over-month basis, up from 0.3% in the previous month, as per the data. Although this deceleration provides the Bank of Korea (BOK) with a brief reprieve, inflation remains well above its 2.0% target. Elevated global energy prices and increasing household borrowing are cited as factors prompting the BOK to likely raise interest rates in the coming months, maintaining a tight monetary stance to quell persistent inflationary pressures in South Korea, which is Asia's fourth-largest economy.

Another poll indicated that experts generally forecast the peak policy interest rate to reach 3.50%, suggesting one further hike this November and another in the first quarter of 2027.