MENA Newswire, SEOUL: South Korea’s consumer inflation eased to 2.0% in January from 2.3% in December, as measured by the consumer price index, government data released Tuesday showed. The CPI, with 2020 set to 100, rose to 118.03 in January. On a month-to-month basis, prices increased 0.4%, following a 0.3% rise in December.
The CPI report, published by the Ministry of Data and Statistics, showed inflation at its slowest annual pace since August 2025, when prices rose 1.7% from a year earlier. Annual inflation had been 2.4% in October and November 2025 before easing to 2.3% in December and 2.0% in January, based on the same index series.
Core inflation, which excludes food and energy, was unchanged at 2.0% year on year for a second straight month, according to the report. The core index stood at 114.42 in January. Core prices rose 0.5% from December, compared with a 0.2% month-to-month increase in December, indicating firmer underlying price pressure at the start of the year despite the slower headline rate.
Category data showed broad price gains from a year earlier, led by miscellaneous goods and services, which rose 5.0% year on year and climbed 2.8% from the previous month. Prices for restaurants and hotels increased 2.8% year on year, while food and non-alcoholic beverages rose 2.9%. Clothing and footwear rose 2.4% from a year earlier, and furnishings and household equipment increased 2.9%.
Food and services drive price changes
Food and non-alcoholic beverages rose 0.6% from December, while health costs increased 1.0% month to month. Recreation and culture rose 0.6%, and education increased 0.3%. Housing, water, electricity, gas and other fuels rose 0.2% from the previous month and were up 1.3% year on year, reflecting steadier movements than other categories.
Transport was the main monthly decline, falling 0.9% from December, even as it remained 1.1% higher than a year earlier. The report also showed communication prices unchanged from December and up 0.4% year on year. Alcoholic beverages and tobacco rose 0.4% from the previous month and were 0.4% higher than a year earlier, while recreation and culture rose 0.9% year on year.
Bank of Korea policy backdrop
The Bank of Korea held its base rate at 2.50% at its Jan. 15 policy meeting, citing inflation expected to stabilize gradually alongside improving growth and lingering financial stability risks. In its policy statement, the central bank said consumer inflation had declined slightly to 2.3% in December and that core inflation was unchanged at 2.0% at the time.
The central bank also said inflation was expected to gradually decline toward the 2% level, supported by stable global oil prices, while noting that an elevated exchange rate could add upward pressure. It said both headline and core inflation for the year were expected to be broadly consistent with its November forecasts of 2.1% and 2.0%, respectively. The bank said short-term inflation expectations among the public were 2.6% in December.