SEOUL, July 2 (Reuters) – South Korea’s consumer inflation accelerated to a two-and-a-half-year high in June, cementing expectations for an interest rate hike by the central bank as early as its upcoming policy meeting on July 16.
The consumer price index (CPI) rose 3.2% from a year earlier, marking the biggest jump since December 2023 after accelerating from 3.1% in May, according to the Ministry of Data and Statistics. It matched the median forecast in Reuters polls.
On a month-on-month basis, the index edged up 0.1%, which also aligned with market expectations.
The accelerating price pressures were heavily driven by high global oil prices, stoked by ongoing geopolitical instability in the Middle East. Supply-side pressures have also been aggravated by a weaker South Korean won, which has increased the cost of imported raw materials.
Five of the seven members on the Bank of Korea’s monetary policy board voted to keep its benchmark interest rate unchanged at 2.50% on May 28, while two dissenters voted for a 25-basis-point hike.
Around two-thirds of the economists polled in May predicted at least one rate hike by end-September.
(Reporting by Cynthia Kim; Editing by Christian Schmollinger and Lincoln Feast.)
