South Korea posted an inflation rate of 0.4 percent last year. The rate is estimated to fall further this year with the Wuhan coronavirus leading to a significant decline in consumption.
The OECD announced on Feb. 10 that the inflation rate of South Korea reached its lowest level since records began to cause the country to rank 33rd in the OECD ahead of Greece (0.2 percent) and Portugal (0.3 percent). Those of Switzerland and Japan are 0.4 percent and 0.5 percent, respectively. In 2017, South Korea’s inflation rate was 1.9 percent, 15th-highest in the OECD. It was 1.5 percent and 26th-highest in 2018.
South Korea’s food- and energy-excluded core inflation rate, which indicates the inflationary pressure on the private economic sector, fell as well. Specifically, the rate fell from 1.7 percent to 1.2 percent and then to 0.7 percent from 2017 to 2019 and its ranking fell from 13th to 19th and then to 29th during the same period.
South Korea’s inflation rate rebounded to 1.5 percent last month, and yet experts point out that the Wuhan coronavirus will drag it down again. “If the spread of the virus is limited to China, South Korea’s domestic consumption will decrease by 0.1 percentage point,” Hyundai Research Institute said, adding, “However, the figure will rise to 0.4 percentage point if any additional spread occurs in South Korea.”