South Korea's inflation remains high, supporting the Bank of Korea's slightly hawkish policy stance.

In June, South Korea's consumer inflation rose to its highest growth rate since December 2023, in line with economists' expectations, further strengthening market predictions: the central bank will continue to closely monitor potential upward pressure on prices. Data released by South Korea's statistics agency on Thursday showed that the consumer price index in June rose by 3.2% year-on-year, compared to a 3.1% increase in May; the median of expectations from media surveys was also 3.2%. Excluding volatile food and energy prices, core inflation remained unchanged at 2.5%, indicating that underlying price pressures continue to persist. This inflation data further consolidates the increasingly hawkish policy stance of the Bank of Korea ahead of its monetary policy meeting on July 16. Policymakers have stated that persistently high inflation, resilient economic growth, a weakening Korean won, and soaring housing prices are all factors that increasingly favor tightening monetary policy. Bank of Korea Governor Lee Ju-yeol has warned multiple times that the prosperity in semiconductor exports is gradually spreading to overall consumption, wages, and investment, exacerbating the risk of long-term inflation. The latest minutes of the central bank's monetary policy meeting show that two members had previously voted in favor of an immediate rate hike, and the core of the discussion among current members has shifted from "whether to hike" to "when to hike."