FX.co ★ South Korea Inflation Falls to 5-Month Low

In May 2025, South Korea experienced a decrease in its inflation rate, dropping to 1.9%, the lowest in five months and below the anticipated 2.1%. This decline comes on the heels of the Bank of Korea's decision to reduce interest rates for the fourth time during the ongoing easing cycle, intended to mitigate the economic effects of recently introduced US tariffs. The central bank also indicated its willingness to enact further rate reductions over the following three months if deemed necessary. In a significant political shift, opposition leader Lee Jae-myung is poised to become South Korea’s next president, after a period of political unrest culminating in the impeachment of former President Yoon Suk Yeol, who attempted unsuccessfully to declare martial law. Additionally, consumer prices saw a 0.1% decrease in May on a monthly basis, contrary to predictions of a 0.1% increase, making it the weakest performance in six months.