By Kwanwoo Jun

South Korea's headline inflation accelerated to a 30-month high in June, topping 3% for a second straight month--well above the central bank's 2% target.

Elevated inflation in the country is likely to strengthen the case for the central bank to tighten monetary policy at its rate-setting meeting later this month.

The Ministry of Data and Statistics said Thursday that the benchmark consumer-price index rose 3.2% from a year earlier in June--the fastest pace since December 2023--after increasing 3.1% in May.

The latest reading was exactly in line with the median forecast of seven economists in a Wall Street Journal poll.

On a month-to-month basis, consumer prices rose 0.1% in June, also matching the poll. Prices in May rose 0.5% from the previous month.

Core CPI, which excludes volatile food and energy prices, rose 2.5% from a year earlier in June and was unchanged from the previous month.

Petroleum products led price gains, with gasoline and diesel prices jumping 23% and 34%, respectively, from a year earlier in June, ministry data showed.

The data suggest that accumulated increases in raw-material costs and a weaker won continue to feed through the economy despite easing energy-price pressures following the U.S.-Iran ceasefire, which has helped reduce tensions in the oil-rich Middle East.

At its previous policy meeting in May, the Bank of Korea stood pat but signaled that it would raise rates in the coming months, citing upside risks to growth and inflation. The bank is scheduled to hold a rate-setting meeting on July 16.

South Korea's trade-reliant economy has performed strongly this year, with semiconductor-led exports surging on red-hot demand for the chips powering the global artificial-intelligence build-out. Exports recorded their strongest growth in nearly 50 years in June, rising 71% from a year earlier to a record monthly value of more than $100 billion.

Citigroup economist Jin-Wook Kim said in a recent note that strong semiconductor-led exports and manufacturing activity continue to support robust economic growth. He added that additional fiscal stimulus later this year and increased investment in technology infrastructure could provide a further boost to growth.

The central bank is expected to raise its 2026 growth forecast again in a quarterly economic outlook update due in August.

In May, the bank raised its forecasts for South Korea's economic growth to 2.6% in 2026 and 2.1% in 2027, while lifting its inflation forecasts to 2.7% this year and 2.3% next year, from 2.2% and 2.0%, respectively.

Many economists expect the bank to begin raising interest rates as early as July to contain inflationary pressures.

As Middle East-driven inflation risks recede, the AI boom could emerge as the next inflation challenge with major chipmakers awarding hefty bonuses and pay raises.

The central bank warned last month that if strong wage gains in the semiconductor sector spread across the economy, they could reinforce inflation through higher costs and stronger consumer demand.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com