South Korea's inflation rate in July fell from a 30-month high, partly due to government measures that suppressed fuel and electricity prices.

In July, South Korea's overall inflation rate declined from a 30-month high reached in June, partly due to government measures that curbed fuel and electricity prices. However, price pressures remain, and the inflation rate is still above the central bank's 2% target. The South Korean Statistics Office reported on Tuesday that the consumer price index (CPI) in July rose by 2.8% year-on-year, a slower increase compared to June's 3.2%, which was the fastest growth rate since December 2023. This reading fell below the median forecast of 2.9% from 11 economists surveyed by the media. The consumer prices in July decreased by 0.2% month-on-month, compared to the forecasted decline of 0.1%. In June, consumer prices showed a slight month-on-month increase of 0.1%. The core CPI, which excludes volatile food and energy prices, rose by 2.6% year-on-year and increased by 0.4% month-on-month in July. With the government imposing a ceiling on retail fuel prices and taking measures to lower electricity costs to curb inflation, the price increases for petroleum products have slowed down. In July, gasoline and diesel prices increased by 13% and 22% year-on-year, respectively, with the increases lower than June's 23% and 34%. On a month-on-month basis, these two prices declined by 6.2% and 6.7%, respectively. Due to the prolonged conflict in the Middle East leading to a spike in oil prices and exacerbating inflationary pressures, the South Korean central bank raised interest rates in July, marking the first increase in more than three years, thereby joining other central banks tightening their policies.