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South Korea’s inflation rate hit a near 24-year high in July, accelerating to top 6.0% and paving the way for the central bank to tighten policy further.
The consumer price index rose 6.3% from a year earlier–the fastest since the height of the financial crisis in November 1998–following a 6.0% increase in June, the statistics office said Tuesday. That was slightly below a median market forecast for a 6.4% increase for July.
Higher prices for industrial goods, agricultural products, services and public utilities kept adding to inflationary pressure, the office said.
The index rose 0.5% from a month earlier, in line with the median forecast for July, compared with a 0.6% increase in June.
Core CPI, which strips out volatile energy and food prices, rose 3.9% from a year earlier and 0.4% from a month ago–the same pace of gains in June.
The Bank of Korea is expected to raise its policy rate again later this month to curb inflation, following its bigger-than-usual half-percentage-point rate increase in July.
BOK Gov. Rhee Chang-yong at a parliament hearing Monday reaffirmed that it would be appropriate for the bank to return to the usual quarter-percentage-point rate increases should inflation stay as projected.
South Korea was a first major developed economy in Asia to start raising rates last year. It has raised the base rate six times since August 2021.
Corrections & Amplifications
This article was corrected at 2324 GMT to reflect that the consumer price index rose 6.3% from a year earlier–the fastest since the height of the financial crisis in November 1998–following a 6.0% increase in June, the statistics office said Tuesday. That was slightly below a median market forecast for a 6.4% increase for July. The original version incorrectly said the median market forecast was for June.
