Gasoline and diesel fuel prices are displayed at a gas station in Seoul, Tuesday. Yonhap
Inflation is projected to rise further this month, driven by higher oil prices amid ongoing tension in the Middle East, the central bank said Wednesday.
"With oil prices remaining high, inflation in May is expected to rise further due to base effects from agricultural, livestock and fishery product prices, (which fell sharply last year)," Bank of Korea (BOK) Senior Deputy Gov. Yoo Sang-dai said during a meeting to review inflation trends.
"Food prices have recently remained stable, and the government's price stabilization measures are also expected to mitigate upward pressure from the oil price shock," he added.
Earlier in the day, government data showed that Korea's consumer prices rose 2.6 percent in April from a year earlier.
It marked the fastest on-year pace since July 2024, driven by a surge in the price of petroleum products, which jumped by a near four-year high of 21.9 percent from a year earlier.
Notably, diesel and gasoline prices jumped 30.8 percent and 21.1 percent on-year, respectively, marking the sharpest increases since July 2022.
"Given the significant uncertainty surrounding the future inflation outlook, including developments in the Middle East, subsequent oil price trends and spillover effects on non-oil items, we will closely monitor inflation with vigilance," Yoo added.
Global oil prices have risen sharply as the Strait of Hormuz has effectively been closed since U.S.-Israeli strikes on Iran in late February, disrupting global oil supplies. Korea relies heavily on imports to meet its energy needs.
Source: Korea Times News
