South Korea's annual inflation in August slowed to a fresh 12-year low, data showed on Monday, providing additional evidence of cooling demand and fuelling market expectations for an additional interest rate cut next week. The consumer price index rose 1.2 percent in August from a year earlier, Statistics Korea data showed, following annual gains of 1.5 percent in July and 2.2 percent in June.
The index rose 0.4 percent in August from the previous month. The August reading marked the lowest since setting 1.1 percent in May 2000. The median forecast from a Reuters survey was for the annual inflation to slow to 1.4 percent in August, with the forecasts ranging from 1.1 percent to 1.6 percent. The index was seen gaining 0.5 percent month-on-month.
Annual core inflation, which strips off volatile food and fuel prices, ticked up to 1.3 percent in August from 1.2 percent in July. It accelerated for the first time since December 2011. Annual inflation averaged 2.3 percent for the January-August period, the statistics agency data showed, far lower than an average of 4.1 percent for the same period in 2011.
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