Overview

• May’s consumer price index rose 1.9% year-on-year, marking the first time inflation dipped below 2% since December 2024.
• Depreciation of the Korean won pushed up costs for imported food, agricultural and fisheries products, contributing to higher consumer prices.
• Service sector price increases continued to exert upward pressure even as overall inflation eased.
• The Bank of Korea implemented its fourth consecutive interest rate cut last week to bolster an economic recovery weighed down by U.S. tariffs.
• Four of the seven central bank board members indicated openness to additional rate reductions in the coming months.