South Korea’s core consumer inflation stayed at 2.8% in October as exports surged, leaving the Bank of Korea weighing price pressures and growth before its next rate decision.
The Ministry of Data and Statistics reported that the Consumer Price Index rose 2.8% from a year earlier, down from 2.9% in September. The index excluding food and energy also advanced 2.8% year over year, while rising 0.4% from September. Headline prices increased 0.2% month over month.
The Bank of Korea (BoK) held its base rate at 3.00% on Oct. 22, before the latest inflation figures were released. The central bank said future rate moves would reflect inflation trends, the domestic economy and financial stability. Its advance estimate showed gross domestic product grew 1.0% from the previous quarter and 3.4% from a year earlier in the third quarter.
Exports added to the growth backdrop. The Ministry of Trade, Industry and Resources reported October exports of $115.28 billion, up 93.7% from a year earlier, and a trade surplus of $42.50 billion. Semiconductor exports increased 259.4% to $56.44 billion. The ministry linked strong chip shipments to global technology companies’ investment in artificial intelligence infrastructure.
FXStreet reported Nov. 4 that MUFG viewed October core inflation as higher than expected and said economic growth and semiconductor shipments kept further BoK tightening in view. MUFG also saw the rate outlook and trade surplus as support for the won, while uncertain foreign equity flows could offset that support.
Reuters reported that its economist poll had forecast October headline inflation at 2.85%, close to the reported 2.8% result. The BoK’s next policy-setting meeting is scheduled for Nov. 26.
