South Korea 2025 Consumer Prices Hit 5-Year Low with 2.1% Rise
South Korea's consumer prices rose 2.1% in 2025, the lowest in 5 years. Discover how the Bank of Korea's inflation targets and a weak won are shaping the economy.
South Korea's inflation headache is finally fading. South Korea 2025 Consumer Prices growth hit a five-year low this year, cooling down significantly after the post-pandemic price shocks that squeezed household budgets across the nation.
South Korea 2025 Consumer Prices Hit Post-Pandemic Low
According to the Ministry of Data and Statistics, consumer prices increased by 2.1% on-year in 2025. This figure is the lowest annual level recorded since the 0.5% seen in 2020. While it remains slightly above the Bank of Korea's inflation target of 2%, the trend shows a clear moderation from the 5.1% peak in 2022.
Currency Volatility and the December Spike
Despite the annual cooling, December 2025 saw a slight uptick as prices rose 2.3% year-on-year. This marks the fourth consecutive month exceeding the central bank's target. Analysts point to the weak Korean won as the primary culprit, which drove up the cost of essential imports. It's a reminder that global currency fluctuations still dictate local price tags.
The weak Korean won remains a significant risk. Even as headline inflation drops, the cost of imported goods and energy could remain high, impacting corporate margins and consumer purchasing power.
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