South Korea’s headline inflation in October hit a near decade high and overshot its annual 2% target for a seventh straight month, as the central bank is dialing down monetary stimulus.
The benchmark consumer-price index gained 3.2% from a year earlier–the fastest pace of growth since January in 2012–following September’s 2.5% rise, the statistical office said Tuesday. That was below the median forecast of five economists polled by The Wall Street Journal for a 3.3% gain.
Higher oil prices have largely led the strong inflation in the country, prompting the government to move to cut fuel taxes for six months temporarily to help ease inflationary pressure.
Compared with the prior month, the index rose 0.1% in October, compared with the median forecast of a 0.2% gain. The latest reading followed the previous month’s 0.5% increase.
Core CPI, which strips out volatile energy and food prices, rose 2.4% in October from a year earlier, faster than September’s 1.5% pace. It rose 0.3% from a month ago after falling 0.1% in September.
The Bank of Korea, which is scheduled to hold a rate-setting meeting on Nov. 25, signals it would tighten its monetary policy further after raising the base interest rate in August.
The bank expects inflation to average 2.1% this year.