South Korea's October Inflation Unexpectedly Accelerates to 2.4%, May Prompt Central Bank to Extend Pause in Easing Cycle

Statistics Korea reported on Tuesday that consumer prices in October rose 2.4% year-on-year, accelerating from the 2.1% increase in September. This pace exceeded the median forecast of 2.2% from economists surveyed and marks the fastest rate since July 2024 (when prices rose 2.6%).

Data showed the core inflation rate, which excludes volatile food and energy items, climbed to 2.2% from 2.0% in September. Both the headline and core inflation indicators are now hovering above the Bank of Korea's 2% target.

The latest inflation figures come at a delicate time for the Bank of Korea, which has held its benchmark interest rate steady in its past three meetings. Although the South Korean economy might face headwinds from US tariffs, concerns over asset bubbles and financial stability risks linked to household debt are preventing policymakers from restarting the rate-cutting cycle that began last October.