South Korea Inflation Rate MoM: November 2025 Analysis and Macro Outlook
South Korea’s November 2025 inflation rate rose 0.10% MoM, matching expectations but down from 0.20% in October. This marks a moderation in price pressures amid stable core indicators and cautious monetary policy. External risks and fiscal prudence will shape the near-term outlook, with inflation expected to hover near the central bank’s target. Market reaction was muted, reflecting confidence in policy calibration despite geopolitical uncertainties.
Table of Contents
South Korea’s inflation rate for November 2025 increased by 0.10% month-over-month (MoM), according to the latest data from the Sigmanomics database. This figure aligns precisely with market estimates and represents a slowdown from October’s 0.20% rise. Over the past 12 months, inflation has averaged approximately 0.45% MoM, indicating a recent easing in price pressures.
Drivers this month
- Shelter costs contributed 0.12 percentage points (pp) to inflation.
- Energy prices remained flat, contributing 0.00 pp.
- Food prices edged up by 0.05 pp, reflecting seasonal demand.
- Used car prices declined, subtracting -0.07 pp.
Policy pulse
The 0.10% MoM inflation rate remains within the Bank of Korea’s target corridor of 2% annual inflation, suggesting that monetary policy remains appropriately calibrated. The central bank has maintained its base interest rate at 3.25%, signaling a cautious stance amid global uncertainties.
Market lens
Immediate reaction: The South Korean won (KRW) appreciated modestly by 0.15% against the US dollar in the first hour post-release, while 2-year government bond yields held steady near 3.10%. Breakeven inflation swaps for the next 2 years remained stable at 1.90%, reflecting market confidence in inflation control.
Core macroeconomic indicators provide context for the inflation reading. South Korea’s GDP growth for Q3 2025 was revised upward to 2.80% year-over-year (YoY), supported by robust exports and domestic consumption. Unemployment remains low at 3.20%, underpinning wage growth of 3.50% YoY, which feeds into inflation dynamics.
Monetary Policy & Financial Conditions
The Bank of Korea’s steady policy rate of 3.25% reflects a balance between curbing inflation and supporting growth. Financial conditions remain neutral, with credit growth at 4.10% YoY and stable lending spreads. Inflation expectations are anchored, with consumer surveys indicating a median 2.10% inflation expectation over the next year.
Fiscal Policy & Government Budget
Fiscal policy remains prudent. The government’s budget deficit narrowed to 1.80% of GDP in Q3 2025, down from 2.30% in the previous year. Targeted subsidies on energy and food have helped moderate inflationary pressures without overheating demand.
External Shocks & Geopolitical Risks
Global commodity prices have stabilized after mid-year volatility, easing imported inflation. However, geopolitical tensions in Northeast Asia pose downside risks to supply chains and investor sentiment. The government’s contingency plans and diversified trade partnerships mitigate these risks.
Drivers this month
- Shelter: 0.12 pp (steady contributor)
- Food: 0.05 pp (seasonal increase)
- Used cars: -0.07 pp (softening demand)
- Energy: 0.00 pp (stable prices)
This chart highlights a clear deceleration in monthly inflation, trending downward from mid-year peaks. The moderation signals that inflationary pressures are contained, supporting the Bank of Korea’s cautious policy stance.
Market lens
Immediate reaction: KRW/USD strengthened by 0.15%, reflecting market relief at the contained inflation print. The 2-year government bond yield remained stable, indicating steady expectations for monetary policy. Inflation-linked bonds showed no significant repricing.
Looking ahead, inflation in South Korea is expected to remain moderate, supported by stable core prices and prudent policy. The Bank of Korea’s inflation target of 2% YoY remains achievable under current conditions.
Bullish scenario (20% probability)
- Global commodity prices decline further, easing imported inflation.
- Domestic demand remains strong but balanced, supporting growth without overheating.
- Monetary policy remains accommodative, fostering investment and consumption.
Base scenario (60% probability)
- Inflation hovers around 0.10–0.20% MoM, consistent with the central bank’s target.
- Fiscal prudence and stable wage growth maintain price stability.
- Geopolitical risks remain contained, with no major supply disruptions.
Bearish scenario (20% probability)
- Geopolitical tensions escalate, disrupting supply chains and pushing prices higher.
- Energy prices spike due to external shocks, feeding into headline inflation.
- Wage pressures accelerate beyond productivity gains, risking a wage-price spiral.
South Korea’s November inflation data confirms a steady but moderated price environment. The 0.10% MoM increase aligns with expectations and reflects balanced macroeconomic fundamentals. Monetary and fiscal policies remain well-tuned to support growth while containing inflation risks. External uncertainties warrant vigilance, but current trends favor a stable inflation trajectory.
Investors and policymakers should monitor wage dynamics, energy prices, and geopolitical developments closely. The Bank of Korea’s cautious approach appears justified, with inflation expectations well-anchored and financial markets stable.
Key Markets Likely to React to Inflation Rate MoM
South Korea’s inflation rate influences several key markets, including domestic equities, currency pairs, and fixed income instruments. The following symbols historically track inflation trends closely, providing valuable signals for traders and investors:
- 005930.KS – Samsung Electronics: Sensitive to domestic economic conditions and inflation-driven cost pressures.
- USDKRW – USD/KRW currency pair: Reacts to inflation data via monetary policy expectations and capital flows.
- BTCUSD – Bitcoin: Often viewed as an inflation hedge, its price can reflect inflation sentiment globally.
- 000660.KS – SK Hynix: Semiconductor sector exposure ties it to economic cycles and inflation trends.
- EURKRW – EUR/KRW pair: Influenced by inflation differentials between South Korea and the Eurozone.
Inflation Rate MoM vs. USDKRW Since 2020
Since 2020, South Korea’s monthly inflation rate has shown a moderate positive correlation with the USDKRW exchange rate. Periods of rising inflation often coincide with KRW depreciation, reflecting concerns over monetary tightening and import cost pressures. For example, the inflation spike in early 2025 corresponded with a 3% KRW weakening. However, recent moderation in inflation has supported KRW stability, as seen in the flat USDKRW trend over the past three months.
FAQs
- What is the latest inflation rate MoM for South Korea?
- The latest inflation rate MoM for South Korea is 0.10% for November 2025, matching market expectations and down from 0.20% in October.
- How does the current inflation rate compare historically?
- The current 0.10% MoM inflation is below the 12-month average of 0.45%, indicating a moderation from mid-2025 peaks.
- What are the macroeconomic implications of this inflation reading?
- This inflation reading supports a stable monetary policy stance, with balanced growth and contained price pressures amid external risks.
Takeaway: South Korea’s November inflation data signals a steady, manageable price environment, supporting cautious monetary policy and stable financial markets amid global uncertainties.
005930.KS – Samsung Electronics (sensitive to SK inflation and economic conditions)
USDKRW – USD/KRW currency pair (impacted by inflation and monetary policy)
BTCUSD – Bitcoin (inflation hedge sentiment)
000660.KS – SK Hynix (linked to economic cycles and inflation)
EURKRW – EUR/KRW pair (reflects inflation differentials)
The November 2025 inflation rate of 0.10% MoM compares to 0.20% in October and a 12-month average of 0.45%. This slowdown reflects easing price pressures after a summer peak of 0.50% in June. The trend suggests a moderation in core inflation drivers, particularly energy and transportation costs.
Seasonal adjustments and base effects contributed to the softer print, with shelter costs remaining the largest positive contributor. Food price inflation showed mild acceleration, while used car prices continued their downward trend, offsetting some gains.