Inflation expectations at 11-month low in April

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Inflation expectations at 11-month low in April

Published: 26 Apr. 2023, 10:07 Updated: 26 Apr. 2023, 10:45

People shop at a discount store in Seoul on April 21. [NEWS1]

Korea's inflation expectations fell to the lowest in 11 months in April on a slide in prices of petrochemical goods, a central bank survey showed Wednesday.

Ordinary people expected consumer prices to rise 3.7 percent for the year ahead, down 0.2 percentage point from what was surveyed a month earlier, according to the poll conducted by the Bank of Korea.

The reading marks the lowest since May last year when the comparable figure was 3.3 percent, the central bank said.

The downturn came as the prices of oil-related goods continued to fall, according to the central bank.

The figures are closely watched, as their upward move could cause businesses to raise prices and people to ask for pay raises, thereby resulting in more upward pressure on inflation going forward.

The country's consumer prices fell to the lowest level in a year in March, in the latest signal that inflation could slow throughout this year.

Consumer prices, a key gauge of inflation, rose 4.2 percent last month from a year earlier, slowing from the rise of 4.8 percent tallied in February.

It marked the lowest level since 4.1 percent growth tallied in March 2022.

Earlier this month, the central bank held its key interest rate steady at 3.5 percent for the second straight time as inflation appears to be easing and concerns are rising over an economic slowdown.

It marked the second straight time that the BOK has stood pat on monetary policy following a rate freeze in February. The pause came after the BOK had delivered seven consecutive hikes in borrowing costs since April last year.

Yonhap