SEOUL, Dec 29 Reuters South Korea39;s annual consumer inflation eased for a second month in December and came in below market expectations, backing policymakers39; outlook that price pressure will gradually ease through 2024.

The December consumer price index CPI gained 3.2 from a year earlier, compared with a rise of 3.3 in November, and was weaker than a median 3.3 rise tipped in a Reuters survey.

The index flatlined on a monthly basis.

Friday39;s inflation data supports the Bank of Korea39;s view on the nearterm inflation path, which is that price pressure will gradually ease to near the bank39;s target level of 2 towards the end of next year as policymakers gear up to a pivot to monetary policy easing.

For the 2023 full year, consumer inflation eased to 3.6 from 5.1 in 2022.

Most economists see the BOK as having reached its peak rate and expect it to start easing policy from the third quarter of next year as cooling inflation makes a restrictive policy rate at 3.50 difficult to justify to the public.

A breakdown of the data showed prices of fresh food items surged 14.5 yearonyear in December but prices of industrial goods rose 2.1 yearonyear, slowing from 2.5 in November.

Reporting by Cynthia Kim in Seoul Editing by Matthew Lewis

Source Reuters