South Korean headline and core inflation likely to have risen gradually in November

South Korea’s both core and headline inflation is likely to have risen gradually in the month of November, according to a Societe Generale research report. In the noncore sectors, prices of fresh food are expected to have fallen because of seasonal patterns. In the meantime, oil products prices are expected to have increased after the rise in prices of crude oil.

In the core sectors, prices of manufacturing goods are likely to have increased gradually. This is predominantly because of the seasonal rise in apparel prices. Meanwhile, service sector inflation is likely to have remained stable, driven by personal services and housing rents.

In early 2017, South Korea’s headline inflation is expected to accelerate towards around 2 percent, owing to base effects from energy prices, said Societe Generale. In the meantime, core inflation is likely to remain at around the present levels for a considerable time. Inflation is not expected to be a major factor in monetary policy decisions for some time, as headline inflation is close to the Bank of Korea’s target level of 2 percent.