Why South Korea's Inflation Cools Down for the First Time in 4 Months

According to Statistics Korea, the consumer price index (CPI) in February 2025 increased 2.0% year-on-year, lower than the 2.2% increase in the previous month.

South Korea’s consumer inflation cooled in February for the first time in four months, government data showed on March 6, easing pressure on policymakers as they look to ease monetary policy further.

South Korea's consumer inflation cooled in February 2025. Illustrative photo

The consumer price index (CPI) rose 2.0% year-on-year in February 2025, down from a 2.2% increase in the previous month, Statistics Korea said, slightly better than the median forecast of 1.95% in a Reuters poll.

The February deceleration came after inflation accelerated in January to a six-month high, as the won weakened and inflation exceeded the central bank's medium-term target of 2 percent.

The won has gained 2% against the dollar this year, trading at 1,444.2 won per dollar on March 6, after falling more than 12% last year - its worst decline in 16 years due to domestic political turmoil.

"Going forward, consumer inflation is expected to fluctuate around the target level amid mixed factors such as a weak domestic currency and low demand pressure," the Bank of Korea said after releasing the data.

Last week, the central bank cut interest rates and said it would take further easing measures this year, shifting its monetary policy stance from tightening to supporting growth in Asia’s fourth-largest economy .

The February 2025 CPI rose 0.3% from January, lower than the 0.7% increase in January 2025 compared to December 2024, but higher than the 0.2% forecast by economists.

Source: https://congthuong.vn/ly-do-lam-phat-han-quoc-lan-dau-ha-nhiet-sau-4-thang-377010.html