Inflation rises to 0.65% every month, rising from 6% in June to 7% in July and August. If you include the cost of owning a house like in the United States, it is expected to rise by around 10%.
Foreign exchange reserves also fell to $438.28 billion as of June, down $9.43 billion from $447.71 billion at the end of the previous month.
On the 1st, the government stimulated the consumer price increase in July due to the monthly average electricity rate of 1535 won (for a family of four) and the gas rate of 2,220 won per household, and predicted a further increase in electricity and gas rates in October.
An official from the Bank of Korea said, "Inflation is highly likely to rise in July and August than in June. I think there is a possibility that it will rise to the late 6% or 7% range even if it is maintained at this level," Newsis reported on the 5th.
The Consumer Price Index of the National Statistical Office in June was 108.22 (2020=100), up 6.0% from the same period of the previous year, the highest in 23 years and 7 months since November 1998 (6.8%) of the foreign exchange crisis.
Inflation is a 16.8% increase in transportation expenses in June compared to the same period of the previous year, 4.8% in livestock and fishery products, 5.8% in personal services and 8.0% in dining out expenses.
Among the rises in June, the cost of eating out (8.0%) was close to October 1992 (8.8%), and processed food (7.9%) was the highest since December 2011 (8.6%).
Consumer prices, which rose sharply in the first half of the year, rose by an average monthly rate of 0.65%, 2.3 times higher than the average monthly increase rate of 0.28% in the first half of the previous year.
The BOK announced that the inflation rate this year would be 4.5% at $100 per barrel (based on Dubai crude) in its economic outlook for May, but on the 4th, Brent futures for September on the London International Futures Exchange (ICE) were $113.81 per barrel.
The rate of increase in the inflation rate is 0.6-0.7% month-on-month from 0.6% in January, an average monthly increase of 0.65%.
The monthly rate of increase in the first half of 2021 is an average of 0.28%, 2.3 times the rate of increase this year, and it will rise to the 7% level in August.
The decrease in foreign exchange reserves was 24.84 billion dollars in the first half of March (3.96 billion dollars), April (8.51 billion dollars), May (1.59 billion dollars) and June (9.43 billion dollars) consecutive decrease. The Bank of Korea announced on the 5th that it would decrease by $10 million.
The Bank of Korea announced on the 5th that "the measure to alleviate volatility in the foreign exchange market" was the cause of the decrease, and this was used to defend the won's value as the won/dollar exchange rate exceeded 1,300 won in June.
The decline in foreign exchange reserves in June was the largest since the decline of USD 11.75 billion in November 2008 during the financial crisis.
In the eurozone (19 countries using the euro), consumer prices recorded an all-time high of 8.6% last month (assuming the trend continues for one year).
The European Union's Statistical Office announced on the 1st that the consumer price index rose 8.6% in June compared to the same period of the previous year, the highest since statistics were compiled in 1997.
In 19 countries in the euro area, the inflation rate of food and alcoholic beverages increased by 8.9% while energy rose 41.9%.
S&P, a credit rating agency, announced in its '3rd Quarter Report' on the 4th that Korea's inflation rate for this year was expected to be 5.0%, and inflation would further increase due to the rise in energy prices.
"By May, inflation in South Korea, Australia, India, New Zealand, the Philippines and Thailand had exceeded the upper bounds of central bank targets," the report said. “After the recovery of domestic demand after the corona virus has slowed, inflation pressure has recently begun to intensify,” he said.
Korea's CPI statistics excludes the cost of living in the US, Japan and Europe, and in the US, cost of living alone accounts for 1/3 of the price index.