South Korea's Inflation Accelerates Amid Rising Energy Costs

South Korea's consumer inflation has accelerated as rising energy costs increasingly impact the domestic economy, reaching the fastest pace since July 2024. According to Jin10, data released on Wednesday showed that South Korea's Consumer Price Index (CPI) rose by 2.6% year-on-year in April, up from a 2.2% increase in March. The core inflation rate, which excludes volatile food and energy prices, increased by 2.2%, indicating that despite escalating external cost pressures, underlying price pressures remain manageable. The strong inflation data highlights the escalating conflicts in the Middle East. In March, South Korea's import prices surged by approximately 16%, marking the fastest increase in nearly three decades, as high oil prices and currency depreciation continue to affect domestic prices. In this context, inflation expectations have risen. An index tracking expected price levels for the coming year reached its highest level since early 2023, and inflation expectations for the next year have also increased, indicating that household concerns about inflation persist.