Import Prices Rise for 8 Consecutive Months... "US-Iran Conflict Not Reflected, Further Increase Expected in March"

Import Prices Rise 1.1% from Previous Month
Longest Upward Streak in 18 Years Since March 2008
Surge in International Oil Prices Could Immediately Affect Consumer Prices

In February, import prices rose by 1.1% compared to the previous month, marking an upward trend for the eighth consecutive month. This is the longest period of increases in 18 years since 2008. Although the won-dollar exchange rate fell, the rise in international oil prices drove up import prices. Given that the recent surge in global oil prices, triggered by the U.S. airstrikes on Iran starting on February 28, was not yet reflected, there is a possibility that import prices will climb even further in March. The Bank of Korea expects that the rise in international oil prices will lead to higher prices for diesel and gasoline, which will have an immediate impact on consumer prices.

Exchange Rate Fell but Oil Prices Rose... Import Prices Post Longest Streak of Increases in 18 Years

According to the "Export and Import Price Index and Trade Index for February 2026 (Provisional)" released by the Bank of Korea on March 17, last month's import price index (based on the Korean won) stood at 145.39 (2020=100), up 1.1% from the previous month. This marks the largest monthly increase in three months since November of last year (2.4%). Compared to the same month last year, the index rose by 1.2%.

Import prices have now been on the rise for eight straight months since July of last year. The last time import prices increased for eight consecutive months was from August 2007 to March 2008, making this the first such streak in 18 years.

This recent increase is attributed to the rise in prices of mineral products and coal and petroleum products due to higher international oil prices, despite a decrease in the won-dollar exchange rate from the previous month. The average won-dollar exchange rate fell from 1,456.51 won in January to 1,449.32 won in February. On the other hand, the average monthly price of Dubai crude oil rose from USD 61.97 per barrel to USD 68.4 per barrel.

By usage, raw materials, primarily mineral products such as crude oil, rose by 3.9% compared to the previous month. Intermediate goods saw a 0.2% increase, as coal and petroleum products rose despite a drop in primary metal products. Capital goods and consumer goods fell by 0.1% and 0.2%, respectively. Excluding the exchange rate effect, import prices last month rose by 1.5% on a contract currency basis compared to the previous month.

There is a high likelihood that import prices will increase further. Lee Moonhee, Head of the Price Statistics Team at the Economic Statistics Department 1 of the Bank of Korea, stated, "Since the airstrikes occurred on February 28, the effects of the U.S.-Iran conflict are not reflected in February's import prices." He added, "Since the airstrikes, both international oil prices and the won-dollar exchange rate have been rising, so upward pressure is expected to intensify in March." From the beginning of this month through the 13th, Dubai crude oil prices increased by 58.6% compared to the previous month's average, and the won-dollar exchange rate rose by 1.4%.

Impact on Consumer Prices as Well... The Key Issue Is Whether the War Will Drag On

The Bank of Korea believes that the recent sharp rise in international oil prices could have an immediate impact on consumer prices, particularly for gasoline and petroleum products.

Lee commented, "In March, gasoline prices at filling stations nationwide have already shown a notable increase," adding, "This is expected to be reflected in the consumer price index for March." However, he also noted, "Since the government implemented a price ceiling system for petroleum products starting on the 13th, prices have shown a slight decline since then, so the extent of the increase may be somewhat limited."

Looking ahead, the future trajectory of consumer prices will depend on whether the U.S.-Iran conflict becomes prolonged. Lee predicted, "Depending on the duration of the conflict, the impact could spread with a time lag to other consumer goods, raw materials, and logistics costs beyond just petroleum products."

Export Prices Rise 2.1%... Driven by Higher Semiconductor Prices and International Oil Prices

Last month, export prices rose by 2.1% compared to the previous month. Year-on-year, they increased by 10.7%. This was the result of higher semiconductor prices and international oil prices, despite the decline in the won-dollar exchange rate. By category, manufactured goods rose by 2.1%, mainly due to computers, electronic and optical devices, and coal and petroleum products. Agricultural, forestry, and fishery products increased by 4.8%. On a contract currency basis, export prices rose by 2.6% from the previous month and by 9.8% year-on-year.

The export volume index, which shows changes in export and import trends, increased by 16.6% year-on-year. Although the number of working days fell due to the Lunar New Year holiday, demand related to artificial intelligence (AI) remained strong, resulting in increases in semiconductors as well as computers, electronic and optical devices. The export value index rose by 28.6%.

During the same period, the import volume index increased by 10.6%, led by mineral products, computers, electronic and optical devices. The import value index rose by 7.9%.

In February, the net barter terms of trade index rose by 13% year-on-year, as export prices (up 10.3%), driven mainly by semiconductors, increased, while import prices (down 2.4%) fell, mainly due to lower prices of mineral products such as crude oil. The income terms of trade index jumped by 31.8% as both the net barter terms of trade and the export volume index increased.

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