According to data released on Tuesday, for the first time the previous month, South Korea noted a yearly decline in consumer prices while exports fell for the 10th straight month, adding to the predictions of additional ease in policies from the central bank’s side.
According to data released by Statistics Korea, in the month of September, the consumer price index fell 0.4% from the previous year. This was very close to the decline of 0.3% predicted by a Reuters survey. Ever since the data first started to become public in 1965, this is the very first time South Korea has noted deflation on a yearly basis.
According to the trade ministry’s data, in September, exports were seen to fall 11.7%, from the previous year, making it the 10th consecutive month of annual loss. The prediction was of an 11.2% decline.
An economist at IBK Securities, Ahn So-Eun stated how the day’s data implies a significant chance of a rate cut this month, or the coming month at most. It was added how the Bank of Korea should’ve been quicker in its response.
The central bank cut interest rates by 25 basis points to 1.50% in July, the first cut in three years as cooling global demand and spreading trade tensions weighed.
The data released by the Statistics Korea also showed how prices of farm products had greatly risen this time the previous year because of the adverse weather conditions, leading to a fall in prices.
On Tuesday, when speaking at a meeting of senior officials from the economy-related ministries, Vice Finance Minister Kim Yong-Beom stated how they were not in a deflation scenario, where the consumer price level continues to fall for a long time.
Prices increased 0.4% on September, month-on-month, whereas the prediction was of a rise of 0.5%.