South Korea Inflation Hits Two-Year High of 3.1 Percent
South Korea's consumer price index rose 3.1% in May, exceeding market expectations and marking the fastest pace since March 2024. The Bank of Korea signaled a potential interest rate hike at its July meeting as rising energy costs and regional conflicts continue to drive price pressures.
South Korea consumer inflation accelerated to 3.1% in May, hitting a two-year high and exceeding market expectations. The price surge follows a 2.6% increase in April as energy costs climbed due to conflict in the Middle East. A rate hike in July is now considered likely by investors and analysts.
### Energy Costs Drive Price Surge Petroleum product prices jumped 24.2% from a year earlier, while international airfares rose 33.5% during the same period. The Ministry of Data and Statistics reported the 3.1% CPI increase on Tuesday, surpassing the 3.0% median forecast from a Reuters poll. Core inflation, which excludes volatile food and energy, also quickened to 2.5% in May.
