Seoul: The Bank of Korea (BOK) anticipates a reduction in inflation for July, attributing this expected change to declining crude oil prices and government measures aimed at stabilizing consumer prices amidst easing tensions in the Middle East.

According to Yonhap News Agency, Deputy Governor Lee Ji-ho discussed the inflation trends during a recent meeting, noting that consumer prices in June increased further from May. This increase was primarily driven by sustained high petroleum product prices and a sharper rise in agricultural product prices. Despite this, the BOK projects that future inflation will remain high in the short term. The central bank foresees that while there will be downward pressure on prices due to the reduction in crude oil costs, this will be counterbalanced by demand-side pressures resulting from ongoing economic growth.

Earlier reports from government data revealed that South Korea's consumer prices experienced a 3.2 percent rise in June compared to the previous year. This represents the most significant growth since December 2023, when the increase was at a similar level. Consumer prices had risen by 3.1 percent in May.

Fuel prices notably surged by 24.7 percent last month, contributing 0.93 percentage points to the overall rise in consumer prices. This surge marks the highest increase since the 35.2 percent growth recorded in July 2022. Additionally, prices for agricultural and fishery products increased by 3.2 percent.