Why analyst calls for a downward revision on Korea's inflation forecast
Initial estimate pegged at 1.7%.
According to DBS, the Bank of Korea is widely expected to keep rates unchanged at tomorrow’s MPC meeting.On inflation, the BOK’s forecast for this year (1.7%) should be revised down.
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Headline CPI inflation has averaged 1.2% in the first three quarters of 2013 and dropped to only 0.8% YoY in September, helped by lower food and transport prices.
That said, the BOK would maintain the view that inflation will pick up to the high-2% level next year due to growth recovery and a less favorable base effect. Core inflation, a better indicator for underlying price pressure, has risen modestly to 1.6% in September.