Bank of Korea: "Middle East Crisis Increases Upward Pressure on Prices in March Due to Rising Oil Prices"

Bank of Korea Holds Meeting to Review Inflation Conditions

"Future Price Trends to Be Heavily Influenced by Oil Price Movements"

Kim Woong, Deputy Governor of the Bank of Korea, stated on March 6, "In March, international oil prices rose due to the situation in the Middle East, increasing upward pressure on prices from a cost perspective."

Deputy Governor Kim chaired a meeting at the Bank of Korea in the morning to review inflation conditions. Regarding the price trends for March, he said, "The recent moderate increase in agricultural and livestock product prices and the government's price stabilization measures are expected to act as downward factors."

He continued, "Future price trends will be heavily influenced by movements in oil prices amid significant uncertainty surrounding developments in the Middle East. We will closely monitor inflation conditions going forward."

Regarding last month's consumer prices, Deputy Governor Kim assessed, "Consumer prices recorded the same 2.0% as the previous month. While the rise in travel-related personal service prices was temporarily significant, oil prices declined and increases in agricultural and livestock product prices also slowed."

He further explained, "Oil prices fell due to a high base effect from the previous year and a decline in the won-dollar exchange rate. As for agricultural, livestock, and fisheries products, the government’s discount support and increased shipments of major agricultural goods reduced the rate of price increase."

With regard to core inflation, he mentioned, "The surge in demand for travel during the Lunar New Year holiday temporarily pushed up prices for travel-related services, such as car rentals and domestic and overseas group tours, resulting in a higher rate of 2.3% compared to the previous month."

Deputy Governor Kim reported, "The living cost inflation rate was 1.8%, marking the first time it fell into the 1% range since August 2025 (1.5%)."

Yonhap News Agency

This content was produced with the assistance of AI translation services.