The Bank of Korea evaluated the inflation rate of 2.0% last month as “compared to advanced countries, prices are stabilizing quickly.” It also predicted that future price trends will show a stable trend.

The Bank of Korea announced this on the 3rd at a price situation review meeting chaired by Vice Governor Kim Woong. Regarding the August inflation rate, Vice Governor Kim said, “The consumer price inflation rate (2.0%) fell 0.6 percentage points from the previous month as core prices (2.1%) slightly decreased and petroleum and agricultural product prices slowed significantly,” explaining, “The base effect from the surge in oil and agricultural product prices last year also had an effect.”

The Bank of Korea forecasts a stable trend in prices going forward. Deputy Governor Kim said, “If there is no major supply shock, the trend will be stable at a similar level to the current level.” The Bank of Korea’s inflation rate forecast for this year is 2.5%.

Deputy Prime Minister Kim explained that this slowing down trend in prices is faster than in advanced countries. He said, “People have suffered greatly from high prices so far, but disinflation (lowering prices) has progressed rapidly,” and “Prices are stabilizing faster than in major advanced countries.” The inflation rate in the U.S. is 2.9% (July), and in the euro area, it is 2.2%.

Deputy Prime Minister Kim added, “The Bank of Korea’s proactive monetary policy, including its preemptive interest rate hikes, the government’s price stabilization measures, and its sound fiscal stance have contributed to the slowdown in prices.”

Reporter Kang Jin-gyu josep@hankyung.com