October 24, 2019 / 9:13 PM / 3 months ago

South Korean inflation expectations fall to record low for third month

FILE PHOTO: A container terminal is seen at Incheon port in Incheon, South Korea, May 26, 2016. REUTERS/Kim Hong-Ji/

SEOUL (Reuters) - South Korean consumers’ inflation expectations fell to a record low in October for the third straight month, a survey from the Bank of Korea showed on Friday, underlining concerns that weakness in consumer price growth would persist.

Consumers’ median inflation expectation for the next 12 months fell to 1.7% in October from 1.8% in September, the lowest since the data release began in February 2002. The three months of declines is the longest streak in more than six years.

Earlier this month, central bank data showed the country had also recorded deflation on an annual basis in September, the first year-on-year deflation since the data were first released in 1965.

The composite consumer sentiment index, compiled from the same survey, improved to 98.6 in October from 96.9 in the previous month. But the reading remained below 100, indicating that consumer sentiment was weaker than a long-term average, which currently covers 2003-2018.

South Korea’s economic growth slowed more than expected in the third quarter, the central bank’s advance estimates showed on Thursday, and though exports showed some signs of recovery, the overall outlook was clouded by a domestic spending slump and intensifying global trade frictions.

Last week, the central bank trimmed its policy interest rate KROCRT=ECI for the second time in three months to 1.25%, matching a record low. It has left the door open to further easing, although another cut is not expected soon. The next policy meeting, the last of 2019, is on Nov. 29.

Reporting by Joori Roh, editing by Larry King

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