South Korea’s Inflation Holds Steady Near Central Bank Target

South Korea's consumer price index rose 2.3% year-over-year in December, matching economist forecasts and slightly decelerating from November's 2.4% pace. Core inflation—stripping out volatile food and energy costs—held firm at 2%, maintaining proximity to the Bank of Korea's target range.

While the data suggests moderating price pressures, analysts caution against expectations of imminent monetary easing. The BOK's January 15 policy meeting is unlikely to yield stimulus measures, particularly given emerging risks in the property sector. Surging mortgage debt levels have heightened financial stability concerns, constraining the central bank's appetite for additional liquidity.

Upward pressure on living costs persists as agricultural price shocks loom. Officials warn sustained food inflation could test the current disinflationary trend, creating policy headaches for a central bank balancing price stability against financial market risks.