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South Korea Inflation Rebounds to 2.2% in June as Central Bank Flags Global Risks

The Bank of Korea expects inflation to decelerate to 1.9% in 2025 after June’s jump triggered by a weaker won that fuelled processed food price gains

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A woman shops at a major discount chain store in Seoul on June 30, 2025. (Yonhap)
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Overview

  • Consumer price index climbed 2.2% year-on-year in June, marking the steepest increase since January and reversing a slight dip to 1.9% in May.
  • Processed food costs rose 4.6% in June, driven by a 6.4% increase in bread prices and a 12.4% surge in coffee costs, adding 0.39 percentage point to overall inflation.
  • Service sector inflation held firm with higher charges for dining out, utilities and personal services, and petroleum prices edged up 0.3% after a previous decline.
  • A weaker Korean won lifted import prices for industrial goods broadly, reinforcing domestic price pressures in food and services.
  • Deputy Governor Kim Woong warned that U.S. tariff policies, Middle East tensions and weather volatility could sustain inflationary risks and the Bank of Korea forecast consumer prices to rise 1.9% in 2025 and 1.8% in 2026.