SEOUL, KOREA - As the consumer inflation rate continues to hover between 1 and 2 percent, the government is set to adjust the consumer inflation outlook downward. According to government sources on September 4, the Ministry of Strategy & Finance has concluded recently that there is little possibility for consumer prices to rise in the second half. This is quite a far cry from the previous prognosis that consumer prices would climb up in the latter half as the economy gains momentum for recovery.

 

According to an analysis, the end-of-the-year consumer inflation rate may be lower than the 1.8-percent level forecast in July. In July this year, the government lowered its average consumer price hike outlook for the whole year to 1.8 percent from 2.3 percent set in late last year. The inflation rate has continued the below 2-percent level for 22 consecutive months since November 2012 when the figure was 1.6 percent.

 

This is the first time since 1965 when the government started collecting price data. A finance ministry official said, "With four months left for the year, there are signs of demand recovery detected. Although there is little possibility for consumer prices to rise abruptly, we will determine whether to adjust the outlook figure after watching the situation for a little while."