South Korean Inflation Picks Up as Political Fallout Spreads
Live Mint-- South Korea’s consumer inflation gained pace as political turmoil weighs on the local currency, threatening price stability in a country heavily reliant on imports for food and energy. Policymakers are also concerned that economic growth may weaken further due to the political turmoil sparked by President Yoon Suk Yeol’s brief imposition of martial law, which ultimately led to his impeachment. “The impact on inflation from a weaker currency may grow in coming months, but the biggest worry at the moment is withering consumer sentiment,” said Ahn Jae-kyun, an analyst at Shinhan Investment. “The won’s drop to its lowest level since 2009 highlights concern about a hit to growth — but it could also limit the extent the Bank of Korea can cut rates to support the economy.” -Hyosung Kwon, economist To read the report, Consumer prices rose sharply after the South Korean government implemented stimulus to shore up growth during the coronavirus pandemic.
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