When inflation came out higher than expected, the US stock market plummeted, but the Korean government subtracted the private estimate and judged it as a base effect, revealing the gap.
On the 12th, the US NYSE Dow Jones average index fell 1.99% and the technology stock-oriented Nasdaq index plunged 2.67%.
The US CNBC reported on the 12th that it was the fastest since 2009 immediately after the financial crisis, saying that the stock market declined when the April Consumer Price Index (CPI), an indicator of inflation, was released at 4.2% compared to the previous year, higher than the market estimate of 3.6%.
At a macroeconomic review meeting on the 13th, Lee Won-won, the first vice minister of the Ministry of Strategy and Finance, said, "The inflation rate in the US in April recorded a higher than expected level, but temporary factors and base effects that may appear during the economic recovery process such as supply shortage and deferred demand have risen this time. "It is a major factor" and "there is no need to overreact."
Regarding Korea's April Consumer Price Index (107.39) rising 2.3% year-on-year, Vice Minister Lee said, "Over 2%, the'base effect' factor, when inflation was significantly lower in April last year, at the time of comparison, was a big factor." In 2Q, there is a high possibility that the inflation rate will temporarily exceed 2% as the base effect is added to the supply side factors," he said as a'temporary phenomenon'.
The Bank of Korea Financial and Monetary Committee revised the consumer inflation rate on March 15 from the initial estimate of 1.3% to higher in March, saying, "The consumer inflation rate is expected to temporarily expand to around 2% in the second quarter and then slow again. “It exceeded the February forecast of 1.3%, and it has fluctuated at around 2% for the time being, and then slightly lowered, and the core inflation rate will gradually rise to the 1% level.”
The National Statistical Office's announcement of the consumer price index of 2.3% in April was higher than the Bank of Korea's estimate, and the government explained it as a “base effect”.
Inflation of agricultural products rose 17.9%, mainly for green onions (270%), apples (51.6%), and red pepper powder (35.2%), and prices of industrial products such as petroleum products (13.4%) rose 2.3%.
The Bank of Korea's March currency volume (M2) increased 1.2% (38.7 trillion won) from the previous year to 3313 trillion won, up 11% from a year ago.
The surge in money supply is the highest growth rate since March 2009 (11.1%), the financial crisis, and has increased by more than 1% every month.