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By | May 1, 2016

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BOK lowers inflation target to 2 for 201618

The nations central bank has set fresh inflation targets for the next three years noticeably lower than the previous target band. The new target comes after criticism that former goals have simply not been attainable. The Bank of Koreas announcement was made at the same time the finance ministry said it would start presenting nominal. or unadjusted for inflation GDP as a regular indicator. in the governments drive for growth. Shin Semin reports. The Bank of Korea lowered its annual inflation target to twopercent starting 2016 scrapping its current policy of using a target band for consumer prices.

The new inflation goal is down from the existing target range of twoandahalf to threeandahalf percent set to expire as of this year. The target is considered the optimal rate of inflation for the economy. described by the BOK as being the most desirable level of price growth for stable economic expansion. Citing weaker inflationary pressure the central bank attributed the trimmed target to the countrys aging population heightened price competition in exports and weakening growth potential influenced by a prolonged fall in crude oil costs. All things considered the BOK said it.

Expects consumer prices to pick up an average onepointseven percent next year. Lowering the target to twopercent is a sign Korea is following the lead taken by developed countries like Canada and the UK and shows its determination to achieve stable economic growth down the line. Under the current target band set back in late 2012 the central bank had missed projections for consumer price growth every month for more than twoandahalf years sparking criticism. and pushing it to put foward more attainable goals and assume responsibility. Starting next year if the actual inflation rate deviates from the targeted two percent.

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