South Korea Inflation Slows to 2.8 Percent in October

South Korea reported a slight moderation in headline inflation for October, with the year-on-year rate slowing to 2.8 percent from 2.9 percent in September. Government data released Tuesday showed the consumer price index rose 0.2 percent on a monthly basis.

Despite this decline, inflation remains above the 2.0 percent target established by the Bank of Korea. Persistent inflationary pressures are being driven by rising household borrowing and elevated global energy prices.

Market consensus indicates the central bank will maintain a tight monetary posture to combat these trends. Forecasts suggest the Bank of Korea will implement one interest rate hike in November and a second in the first quarter of 2027, with the policy interest rate expected to peak at 3.50 percent.