South Korea’s Core Inflation Rate MoM: November 2025 Analysis and Macro Outlook
The latest data from the Sigmanomics database reveals South Korea’s core inflation rate for November 2025 held steady at 0.10% month-over-month (MoM), matching both the previous month and market expectations. This persistence in subdued core inflation reflects ongoing structural and cyclical factors shaping the South Korean economy amid evolving global and domestic conditions. This report provides a comprehensive, data-driven analysis of the recent core inflation print, contextualizes it against historical trends, and assesses its implications for monetary policy, fiscal stance, financial markets, and broader macroeconomic stability.
Table of Contents
South Korea’s core inflation rate remained unchanged at 0.10% MoM in November 2025, continuing a trend of low but steady inflation since mid-2025. This stability contrasts with the more volatile readings earlier this year, such as the 0.90% spike in February. The persistence of subdued core inflation amid moderate economic growth signals a complex interplay of domestic demand, supply-side factors, and external pressures.
Drivers this month
- Shelter costs contributed approximately 0.03 percentage points, reflecting modest housing market pressures.
- Transportation and energy components remained neutral, with no significant upward or downward impact.
- Core goods prices showed minimal movement, indicating weak consumer demand for durable goods.
Policy pulse
The Bank of Korea’s inflation target remains at 2%, with current core inflation well below this threshold. The steady 0.10% MoM rate suggests limited immediate pressure for aggressive monetary tightening. However, the central bank remains vigilant given global inflationary risks and currency volatility.
Market lens
Immediate reaction: The South Korean won (KRWEUR) appreciated marginally by 0.10% following the release, reflecting market relief at stable inflation. Short-term government bond yields held steady, while implied policy rate futures showed a slight reduction in expected hikes over the next quarter.
The core inflation rate’s stability aligns with other foundational macroeconomic indicators. South Korea’s GDP growth for Q3 2025 was revised slightly downward to 1.80% annualized, reflecting moderate domestic demand and export headwinds. Unemployment remains low at 3.20%, supporting consumer spending but without triggering wage-driven inflation pressures.
Monetary Policy & Financial Conditions
The Bank of Korea has maintained its policy rate at 3.25% since September 2025, balancing inflation control with growth support. Financial conditions remain moderately tight, with credit growth slowing to 4.50% YoY amid cautious corporate borrowing. The stable core inflation rate supports a wait-and-see approach to further rate adjustments.
Fiscal Policy & Government Budget
Fiscal policy remains expansionary, with the government targeting a 2.80% of GDP deficit for 2025 to support infrastructure and social programs. This fiscal stance provides a buffer against external shocks but may limit room for further stimulus if inflationary pressures rise.
External Shocks & Geopolitical Risks
Global supply chain disruptions have eased, but geopolitical tensions in Northeast Asia continue to pose risks. Energy prices have stabilized, reducing imported inflation risks. However, uncertainties around trade relations with China and the US could affect export-driven growth and inflation dynamics.
This chart signals a stabilization of core inflation at low levels, reversing the sharp spikes seen earlier in 2025. The trend suggests that inflation expectations are anchored, reducing the risk of a wage-price spiral. However, the persistence of a 0.10% monthly increase indicates underlying price pressures remain, warranting close monitoring.
Market lens
Immediate reaction: Following the release, the KOSPI index dipped 0.20%, reflecting investor caution amid muted inflation. The KRWEUR currency pair strengthened slightly, while 2-year government bond yields remained flat, signaling market confidence in the central bank’s steady policy stance.
Looking ahead, South Korea’s core inflation trajectory will hinge on several factors, including global commodity prices, domestic demand recovery, and monetary policy adjustments. The Bank of Korea’s cautious stance suggests a base case of continued steady inflation around 0.10–0.20% MoM through early 2026.
Bullish scenario (20% probability)
- Stronger-than-expected domestic demand and wage growth push core inflation above 0.30% MoM.
- Monetary tightening accelerates, with policy rates rising to 3.75% by mid-2026.
- Improved export performance supports economic growth and inflation normalization.
Base scenario (60% probability)
- Core inflation remains stable at 0.10–0.20% MoM, consistent with moderate growth and contained wage pressures.
- Monetary policy remains on hold, with gradual adjustments if inflation deviates significantly.
- Fiscal policy continues to support growth without overheating the economy.
Bearish scenario (20% probability)
- External shocks, such as renewed supply chain disruptions or geopolitical tensions, depress demand and push core inflation below 0.10% MoM.
- Deflationary pressures emerge, prompting potential monetary easing.
- Currency volatility undermines investor confidence, impacting financial markets.
South Korea’s core inflation rate holding steady at 0.10% MoM in November 2025 reflects a delicate balance between subdued demand and stable cost pressures. The Bank of Korea’s cautious monetary stance is justified by this data, though vigilance remains essential amid external uncertainties. Fiscal support and geopolitical developments will be key to sustaining growth without igniting inflationary spikes. Market participants should monitor wage trends, commodity prices, and policy signals closely in the coming months.
Key Markets Likely to React to Core Inflation Rate MoM
The core inflation rate in South Korea is a critical indicator for multiple asset classes. Its movements influence currency valuations, bond yields, and equity market sentiment. The following symbols historically track or react to changes in South Korea’s inflation dynamics:
- KRWEUR – The South Korean won to euro currency pair, sensitive to inflation-driven monetary policy shifts.
- KOSPI – South Korea’s benchmark equity index, reflecting investor sentiment on economic growth and inflation.
- 005930.KS – Samsung Electronics, a major export-driven stock sensitive to macroeconomic conditions.
- BTCUSD – Bitcoin, often viewed as an inflation hedge and risk sentiment barometer.
- USDKRW – The US dollar to South Korean won pair, inversely correlated with KRWEUR and sensitive to inflation expectations.
Insight: Core Inflation Rate MoM vs. KOSPI Index Since 2020
| Year | Average Core Inflation MoM (%) | KOSPI Annual Return (%) |
|---|---|---|
| 2020 | 0.15 | -10.50 |
| 2021 | 0.35 | 30.80 |
| 2022 | 0.40 | -12.10 |
| 2023 | 0.20 | 15.30 |
| 2024 | 0.25 | 10.70 |
| 2025 (YTD) | 0.18 | 5.20 |
The data shows a positive correlation between moderate core inflation and KOSPI returns, with inflation spikes often coinciding with market volatility. The 2025 subdued inflation aligns with modest equity gains, underscoring the market’s cautious optimism.
FAQ
- What is the significance of South Korea’s Core Inflation Rate MoM?
- The Core Inflation Rate MoM measures the monthly change in prices excluding volatile items. It signals underlying inflation trends and guides monetary policy decisions.
- How does the latest Core Inflation Rate MoM impact South Korea’s economy?
- The steady 0.10% MoM rate suggests contained inflation pressures, supporting a cautious monetary policy stance and moderate economic growth.
- What factors influence South Korea’s Core Inflation Rate MoM?
- Key factors include domestic demand, wage growth, import prices, supply chain conditions, and geopolitical risks affecting trade and energy costs.
Takeaway: South Korea’s core inflation rate holding steady at 0.10% MoM signals a balanced inflation environment, supporting a cautious but steady monetary policy approach amid moderate growth and external uncertainties.
KRWEUR – South Korean won to euro, sensitive to inflation-driven monetary policy changes.
KOSPI – Benchmark equity index reflecting economic growth and inflation sentiment.
005930.KS – Samsung Electronics, a major export stock influenced by macroeconomic trends.
BTCUSD – Bitcoin, often viewed as an inflation hedge and risk sentiment indicator.
USDKRW – US dollar to South Korean won, inversely correlated with KRWEUR and inflation expectations.
South Korea’s core inflation rate of 0.10% MoM in November 2025 matches the October reading and remains below the 12-month average of 0.30%. This marks a significant moderation from the early 2025 peak of 0.90% in February. The chart below illustrates a clear downward trend in monthly core inflation since mid-year, reflecting subdued demand and stable input costs.
Compared to the volatile first quarter, the last six months show a plateauing effect, with core inflation oscillating narrowly between 0.10% and 0.50%. This suggests that inflationary pressures are contained but not abating further, indicating a new equilibrium in price dynamics.