State benefits, falling oil prices slow inflationKorea’s inflation moderated in June on falling oil prices and the government’s expansion of free school lunch and child care programs, giving the central bank more leeway to forgo raising borrowing costs.
Consumer prices increased 2.2 percent from a year earlier after a 2.5 percent gain in May, Statistics Korea said yesterday. The median estimate in a Bloomberg News survey of 12 economists was for a 2.5 percent gain. Prices fell 0.1 percent from May.
The Ministry of Strategy and Finance on June 28 lowered its forecasts for inflation and economic growth for this year, citing the European debt crisis as a “long-term threat.” The Bank of Korea, which targets inflation at between 2 percent and 4 percent, will determine borrowing costs on July 12.
“Inflation is going to decelerate for months to come,” said Lim Ji-won, an economist at JPMorgan Chase in Seoul. “Prices of manufactured goods have been falling with oil prices so this is being reflected in June.”
Core consumer prices, which exclude oil and agricultural products, advanced 1.5 percent in June from a year earlier.Bloomberg
More in Finance
Kospi breaks another record as buying spree continues
Samsung Life warned by the FSS about claim denials
Dollar's weakness pushes won to 30-month high
Kospi hits another high on chipmaker optimism
Eight companies agree to share credit card data