Lee Chang-yong "It's too early to ease inflation concerns... The process to reach target levels is not easy"

The Bank of Korea Holds Briefing on 'Price Stability Target Operation Status Review'

"The last mile to bring inflation back to the target level may not be easier than before."

Lee Chang-yong, Governor of the Bank of Korea, stated in his opening remarks at the 'Price Stability Target Operation Status Review' briefing on the 20th, "Although the impact of interest rate hikes is expected to continue and the inflation slowdown trend is likely to persist, the inflation rate still significantly exceeds the target level, so it is judged that it is too early to ease concerns about inflation."

Governor Lee assessed, "Looking back on this year at the end of 2023, there has been considerable progress in the inflation slowdown process," and explained, "The consumer price inflation rate, which rose to 6.3% in July last year, significantly slowed to 3.3% in November this year, and core inflation also decreased from 4.2% in November last year to 2.9% last month."

He expressed concern, saying, "Amid great uncertainty regarding the future trends of raw material prices such as international oil prices, the impact of accumulated cost-push pressures continues, and labor costs remain high. Considering these factors, the last mile to bring inflation back to the target level may not be easier than before."

He added, "Last week, the U.S. Federal Reserve (Fed) and the European Central Bank lowered their inflation forecasts reflecting the recent inflation slowdown trend but still remain cautious about inflation, which I believe also reflects the difficulties of the last mile."

[Image source=Yonhap News]

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