South Korea’s annual inflation rate eased to 2% in January 2026 from 2.3% in December, extending its slowdown for a second straight month and marking the lowest reading since August. The figure broadly matched market expectations and the central bank’s target, as softer fuel prices and favorable base effects helped curb price pressures. Last month, the Bank of Korea held its policy rate at 2.5% and removed language pointing to the possibility of further easing, though policymakers remain vigilant about currency volatility and the inflationary impact of a weak won. Price increases were strongest in miscellaneous goods & services (5%), food & non-alcoholic beverages (2.9%), furnishings, household equipment & routine maintenance (2.9%), restaurants & hotels (2.8%), and clothing & footwear (2.4%). On a monthly basis, consumer prices rose 0.4% in January, accelerating from 0.3% in December and in line with consensus forecasts.