Korea: Inflation picks up in April from the prior month
Latest reading: Consumer prices were up 2.6% in annual terms in April, following a 2.2% increase in the prior month. April’s reading was the strongest since May 2024, highlighting the effects of higher oil prices amid the U.S-Iran conflict.
Relative to the previous month’s figures, there were higher price pressures for housing and utilities (+1.7% in annual terms vs +1.5% in March), transportation (+9.7% vs +5.0% in March) and recreation and culture (+3.4% vs +2.8% in March). In contrast, price pressures reduced for food and non-alcoholic beverages in April (+0.3% vs +0.5% in March). Finally, the change in clothing and footwear prices was the same as in the prior month (+2.1% in April and March).
Meanwhile, core consumer prices were up 2.2% in annual terms in April, unchanged from the previous month’s reading.
Finally, consumer prices rose 0.48% in April on a month-on-month basis, following a 0.34% rise in the previous month.
Panelist insight: Commenting on the outlook, Nomura’s analysts stated:
“As oil prices have remained higher for longer than our previous assumption we revise up our 2026 headline inflation forecast to […]. However, we expect core inflation to remain stable at around 2.2% throughout most of the year before it returns to 2% by Q1 2027, as we believe the government’s? policy and mild consumption growth may weaken the pass-through effects from higher oil prices.”