South Korea’s 2026 annual inflation market reflects closely balanced trader views, with 2.7–2.9% edging 3.0%+ by just over two percentage points in implied probability. Recent data show headline CPI at 2.9% year-over-year in September after August’s 3.1% print, while core inflation eased to 2.8% amid fading base effects from telecom discounts. Persistent upward pressure stems from elevated petroleum prices (+14.8% YoY) linked to Middle East tensions and pass-through into services and durable goods, including semiconductors. The Bank of Korea projects 2.7% for the full year and has hiked its policy rate to 3.0% in July–August, citing entrenched cost pressures and improving demand from strong exports. AMRO’s matching 2.7% forecast and October’s expected near-3% reading underscore the narrow gap between scenarios. The next BOK meeting on October 22 and upcoming CPI releases will likely influence positioning ahead of year-end resolution.