South Korea’s headline inflation averaged 2.5% in 2021 after remaining above the central bank’s annual 2.0% target for a ninth consecutive month in December.

The highest annual inflation since 2011 in Asia’s fourth largest economy justifies the Bank of Korea’s ongoing tightening of its easy-money policy that had been induced by the pandemic.

The benchmark consumer-price index rose 3.7% from a year earlier in December, compared with the prior month’s decade high of a revised 3.8%, the statistical office said Friday. The latest reading matched the median forecast of five economists polled by The Wall Street Journal.

Higher prices of agricultural and industrial products as well as utilities services continued to add to inflationary pressure even though a temporary fuel-tax cut helped ease price growth on month in the country.

Compared with the prior month, the index rose 0.2% in December, a softer pace than the previous month’s 0.4% increase. The latest reading was in line with the median forecast.

Core CPI, which strips out volatile energy and food prices, rose 2.2% from a year earlier, compared with November’s 1.9% gain. It rose 0.4% from a month ago, a faster pace than 0.1% in November.

The Bank of Korea has signaled it would tighten policy further to curb inflation since it raised interest rates in November for the second time in 2021.

The bank expects inflation to average 2.0% in 2022, up from its earlier projection of 1.5%.

First Vice Finance Minister Lee Eog-won said Friday he expects inflationary pressure to remain high in the first half of 2022 before tapering off gradually.

Source: This post first appeared on

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Ask Larry: Will Social Security Penalize Me Because Of My Earnings?

Ask Larry Economic Security Planning, Inc. Today’s column addresses questions about Social…

Could Developing Nations Follow El Salvador’s Move To Bitcoin?

LA LIBERTAD, EL SALVADOR – JUNE 16: Beach town of El Salvador’s…

Zoom Video, Carnival, Peloton, Moderna: What to Watch in the Stock Market Today

Global markets are taking a hit on Black Friday amid worries about…

Call For ‘National Emergency’ In Australia As Unrelenting Delta Variant Surge Forces Sydney To Tighten Lockdown

Topline The Australian state of New South Wales on Friday announced a…