Korea Inflation Could Gradually Return to BOK's Target Through 2027

Dow Jones13:46

0546 GMT - Consumer inflation in South Korea could gradually return to the central bank's 2% target through 2027--earlier than the bank expects, says Nomura's Jeong Woo Park. Weaker consumption and a softer housing market could ease the Bank of Korea's concerns about price and financial stability, while the semiconductor boom has had a limited impact, the economist says. Headline inflation, which eased to 2.8% in October from 2.9% in the previous month, provides limited evidence of renewed inflation pressures, as declines in agricultural prices offset increases in industrial goods and services, he says. Nomura continues to expect the BOK to raise interest rates by 25 basis points each in November and February, citing "elevated and sticky" core inflation.

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