South Korean inflation expectations fall in August after 6 months of gains: Survey

SEOUL: South Korean consumers' inflation expectations fell in August after six months of rises, a central bank survey showed on Tuesday (Aug 22), while their assessment of economic conditions improved.

The median of inflation expectations for the next 12 months fell to 4.3 per cent in August from 4.7 per cent in July, which was the highest since the monthly survey of consumers began in February 2002.

Meanwhile, the Consumer Sentiment Index (CSI) rebounded to 88.0 in August, though still below the 100-mark that divides optimism and pessimism, after falling for three straight months to 86.0 in July, which was the lowest since September 2020.

The finding comes two days before the Bank of Korea's rate decision on Thursday, following an unprecedented half-point rate hike to 2.25 per cent in July.

Asia's fourth-largest economy is expected to lose momentum this year as downside risks to exports and consumer spending have risen from slowing global demand and higher interest rates.

South Korea's annual inflation accelerated to 6.3 per cent in July from 6.0 per cent in June, hitting the fastest rate since late 1998, while other figures also indicated the pace of price rises may be near a peak.

The survey polled 2,400 households in urban areas for inflation expectations and consumer sentiment among other topics, between Aug 8-16.