South Korea's central bank indicated on Wednesday that the pace of consumer inflation is set to moderate in September compared to the previous month, as base effects gradually diminish, though underlying price pressures, particularly for core goods, are expected to persist.

During a meeting to assess inflation trends, Bank of Korea Deputy Governor Lee Ji-ho noted that August's consumer price index rose at a faster clip than the prior month, influenced by a base effect stemming from a discount plan introduced by a telecom company last year. He added that while September's consumer price gains are projected to dip below August's level as these base effects fade, the broader upward trajectory will continue, especially in the core goods segment.

Government data released earlier in the day revealed that South Korea's consumer price index (CPI) climbed 3.1% year-on-year in August, driven largely by elevated oil prices. Additionally, higher mobile service subscription fees contributed to the uptick, linked to a base effect from the significant price cuts SK Telecom implemented last year following a data breach incident. Excluding volatile food and energy costs, the core inflation rate stood at 3.4% in August, marking its highest level since May 2023, when it registered 3.8%.