South Korea CPI November 2025: Moderating Inflation Amid Persistent Pressures
Key Takeaways: South Korea’s November 2025 Consumer Price Index (CPI) rose 3.90% year-over-year, slightly above the 3.80% estimate but down from 4.60% in October. Core inflation pressures remain elevated despite easing headline rates. Monetary policy remains cautious as external risks and fiscal dynamics shape the outlook. Market reactions were muted but attentive to inflation trajectory and central bank signals.
Table of Contents
The latest CPI release for South Korea, published on November 19, 2025, shows headline inflation at 3.90% year-over-year (YoY), a moderation from October’s 4.60% but still above the 12-month average of approximately 3.80%. This data, sourced from the Sigmanomics database, reflects ongoing inflationary pressures amid a complex macroeconomic environment.
Drivers this month
- Shelter costs contributed 0.22 percentage points (pp), reflecting sustained housing demand.
- Food prices added 0.15 pp, driven by supply chain disruptions and seasonal factors.
- Energy prices declined slightly, subtracting -0.05 pp, easing headline inflation.
Policy pulse
The Bank of Korea’s inflation target remains at 2%, placing the current 3.90% reading well above target but showing signs of easing from recent peaks. This supports a cautious monetary stance, balancing inflation control with growth concerns.
Market lens
Immediate reaction: The South Korean won (KRWEUR) depreciated marginally by 0.10% post-release, while 2-year government bond yields edged up 5 basis points, reflecting investor caution amid persistent inflation risks.
Examining core macroeconomic indicators alongside CPI reveals a nuanced inflation landscape. The 3.90% headline CPI contrasts with a core inflation rate estimated near 3.50%, excluding volatile food and energy components. This suggests underlying price pressures remain entrenched.
Monetary Policy & Financial Conditions
The Bank of Korea has maintained its policy rate at 3.25% since September 2025, reflecting a wait-and-see approach. Financial conditions have tightened modestly, with credit growth slowing to 4.20% YoY, down from 5.10% six months ago. Inflation expectations remain anchored but elevated, with 5-year breakeven inflation rates near 2.80%.
Fiscal Policy & Government Budget
Fiscal policy remains expansionary, with the government running a 1.80% of GDP deficit in Q3 2025 to support growth amid global uncertainties. Public spending on infrastructure and social programs has kept demand buoyant, indirectly sustaining inflationary pressures.
External Shocks & Geopolitical Risks
Global commodity price volatility and geopolitical tensions in Northeast Asia continue to pose upside risks to inflation. Recent supply chain disruptions from regional conflicts have pressured food and energy prices, complicating the inflation outlook.
Drivers this month
- Shelter: 0.22 pp (YoY)
- Food: 0.15 pp (YoY)
- Energy: -0.05 pp (YoY)
This chart highlights a clear trend of moderating headline inflation after a summer peak, yet core inflation remains sticky. The decline in energy prices provides temporary relief, but persistent shelter and food inflation suggest ongoing cost pressures.
Market lens
Immediate reaction: KRWEUR depreciated 0.10%, 2-year yields rose 5 bps, and breakeven inflation rates held steady, reflecting cautious market sentiment amid mixed inflation signals.
Looking ahead, South Korea’s inflation trajectory faces several scenarios shaped by domestic and external factors. The baseline forecast anticipates inflation easing toward 3.00% by mid-2026 as supply constraints ease and monetary policy effects materialize.
Bullish scenario (20% probability)
- Global commodity prices fall sharply, reducing energy and food inflation.
- Monetary tightening leads to subdued demand and faster inflation normalization.
- Inflation falls below 2.50% by Q3 2026, enabling policy easing.
Base scenario (60% probability)
- Gradual easing of supply bottlenecks and stable fiscal support.
- Inflation moderates to 3.00% by mid-2026, with core inflation around 2.80%.
- Monetary policy remains on hold, balancing growth and inflation risks.
Bearish scenario (20% probability)
- Geopolitical tensions escalate, disrupting supply chains further.
- Energy and food prices spike, pushing inflation above 4.50% into 2026.
- Bank of Korea forced into aggressive rate hikes, risking growth slowdown.
Policy pulse
The Bank of Korea is expected to maintain a cautious stance, monitoring inflation data closely. Any sustained uptick above 4% could prompt a rate hike, while easing inflation may allow a pause or gradual cuts in late 2026.
South Korea’s November 2025 CPI print signals a tentative easing of inflation pressures but underscores persistent core inflation risks. Monetary policy faces a delicate balancing act amid external uncertainties and fiscal stimulus. Market participants should watch inflation components closely, especially shelter and food, for clues on the central bank’s next moves.
Key Markets Likely to React to CPI
The South Korean won (KRWEUR) and local government bonds are primary markets sensitive to CPI fluctuations. Additionally, the 005930.KS (Samsung Electronics) stock often reacts to inflation-driven cost pressures and consumer demand shifts. The EURKRW currency pair tracks inflation expectations and monetary policy divergence. In crypto, BTCUSD sometimes reflects risk sentiment shifts linked to inflation data.
Indicator vs. 005930.KS Since 2020
Since 2020, periods of rising CPI in South Korea have correlated with increased volatility in Samsung Electronics (005930.KS). Inflation spikes often pressure margins, while easing inflation supports consumer electronics demand. The 2025 inflation moderation aligns with a recent stabilization in 005930.KS’s price, suggesting a potential recovery phase if inflation remains controlled.
FAQ
- What is the current CPI reading for South Korea?
- The latest CPI for South Korea is 3.90% year-over-year as of November 2025.
- How does the CPI affect South Korea’s monetary policy?
- Persistent inflation above the 2% target keeps the Bank of Korea cautious, potentially delaying rate cuts or prompting hikes if inflation rises further.
- What are the main drivers of inflation in South Korea?
- Shelter and food prices are the primary contributors, with energy prices recently easing headline inflation.
Takeaway: South Korea’s inflation is moderating but remains above target, requiring vigilant policy and market monitoring amid external risks.
005930.KS – South Korea’s leading tech stock sensitive to inflation-driven demand and cost pressures.
EURKRW – Currency pair reflecting inflation expectations and monetary policy divergence.
BTCUSD – Crypto asset tracking risk sentiment shifts linked to inflation data.
000660.KS – SK Hynix, impacted by inflation through input costs and consumer demand.
USDKRW – Key forex pair sensitive to inflation and monetary policy in South Korea.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
South Korea’s CPI in November 2025 at 3.90% YoY marks a decline from October’s 4.60%, yet remains above the 12-month average of 3.80%. Month-over-month (MoM) inflation slowed to 0.10%, compared to 0.30% in October, signaling easing price pressures.
Core inflation, excluding food and energy, held steady at 3.50%, indicating persistent underlying demand-driven inflation. Energy prices fell 1.20% MoM, offsetting some headline inflation, while food prices rose 0.40% MoM, reflecting seasonal supply constraints.