Overview
- Government data released Wednesday showed consumer prices rose 2.6% year over year in April, the fastest since July 2024, driven by a 21.9% jump in petroleum products.
- Higher fuel costs fed into services as international airfares rose 15.9% and fuel surcharges increased, raising travel and shipping costs for households and businesses.
- The government said temporary fuel price caps and tax relief softened the shock, estimating April inflation would have been about 1.2 percentage points higher without those measures.
- Citing Wednesday's figures, Bank of Korea officials said it may be time to consider raising rates and warned inflation will likely rise further in May due to high oil prices and base effects in food categories.
- Markets moved on the signals as the three‑year Treasury yield climbed to 3.675%, the highest since November 2023, and analysts said the bank could signal a change on May 28 with a possible rate hike as early as July.