South Korea Inflation Cools, Easing Path for Rate Cuts

By Kwanwoo Jun

South Korea's headline inflation cooled in May to stay below the central bank's 2.0% annual target, justifying its resumed easing of policy to support economic growth.

The benchmark consumer-price index rose 1.9% from a year earlier, following a 2.1% increase in April, the country's statistics office said Wednesday.

The latest print, the weakest since a 1.9% gain in December, missed the median forecast from seven economists surveyed by The Wall Street Journal tipping a 2.0% gain for May.

Price growth was largely kept in check by lower prices of oil products, fruit and vegetables, despite gains in the prices of some other agricultural and livestock goods, according to the statistics office.

Compared with the prior month, the CPI fell 0.1% in May. The WSJ poll forecast was for a flat result. In April, consumer prices edged up 0.1% from the previous month.

Core CPI, which excludes volatile food and energy prices, rose 2.0% from a year earlier in May and gained 0.2% from the previous month.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com