South Korea inflation climbs to 14-year high in May, exceeding forecasts

Client worth inflation in South Korea has gained some extra steam in Might, topping expectations once more to succeed in a 14-year excessive.

Particularly, the patron worth index climbed 5.4% Y/Y in Might, surpassing a Reuters ballot of 5.1% and up from 4.8% in April, in response to the Statistics Korea information. Core CPI, excluding risky meals and power costs, gained 3.4% Y/Y in Might.

This marks the 14th consecutive month of CPI operating above the Financial institution of Korea’s 2% inflation goal, Reuters famous. In flip, the central financial institution could probably goal additional rate of interest hikes to assist carry down inflationary pressures.

Nonetheless, “we do not anticipate rates of interest to be raised sooner due to in the present day’s figures, however the central financial institution might want to preserve the tightening stance whereas looking forward to any signal of inflation peaking out round July,” stated Daishin Securities Economist Kong Dong-rak, who expects the BOK to hike charges two extra instances in 2022, as reported by Reuters.

Since August 2021, the BOK has elevated the coverage charge by a complete of 1.25 proportion factors in an effort to tame inflation.

South Korean ETFs: iShares MSCI South Korea (EWY), Direxion Every day South Korea Bull 3x Shares (KORU) and Franklin FTSE South Korea (FLKR).

Beforehand, (April 26) South Korea turned the primary developed nation to hike rates of interest in pandemic period.