South Korea Consumer Price Inflation 2025 Hits 5-Year Low at 2.1%
South Korea's annual consumer price inflation for 2025 hit a five-year low of 2.1%, though December's 2.3% reading exceeded the central bank's target for a fourth month.
Your cost of living isn't dropping just yet. South Korea's consumer prices exceeded the government's target for the fourth consecutive month to close out the year. According to Yonhap, the Consumer Price Index (CPI) rose 2.3% in December 2025 compared to a year ago, staying above the Bank of Korea's2% target.
Analyzing South Korea Consumer Price Inflation 2025 Trends
Looking at the full year, the picture is a bit more stable. The average inflation rate for 2025 stood at 2.1%, marking the lowest annual increase in five years. While global supply chain relief helped cool prices earlier in the year, the December spike has raised eyebrows among investors hoping for an early 2026 rate cut.
Persistent inflation above 2% might delay the Bank of Korea's pivot to lower interest rates. Investors should prepare for a 'higher-for-longer' stance in the first quarter of next year.
Stock Market Resilience Amid Macro Headwinds
Despite the inflation data, the KOSPI index surged today. Markets were buoyed by reports that the U.S. is easing chip equipment export restrictions for Samsung Electronics and SK Hynix plants in China. This geopolitical de-escalation, combined with President Lee's upcoming state visit to Beijing, has provided a necessary cushion for South Korean equities.
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