Consumer prices in South Korea rose at the fastest pitch in nearly 24 years in June. This increase was mostly the result of rising energy prices, According to government data released on Tuesday.
According to Statistics Korea's data, consumer prices increased 6% from a year ago in the past month, picking up speed from a 5.4% increase in May. It represented the highest inflation rate since a 6.8% increase in November 1998, when South Korea was grappling with the 1997–98 Asian financial crisis.
For the fifteenth consecutive month in June, consumer prices increased by more than 2%.
As a result of rising commodity prices brought on by the ongoing conflict between Russia and Ukraine and supply disruptions around the world, South Korea is under increasing pressure from inflation. The economic recovery has also led to a rise in demand-pull inflation.
According to the statistics agency, inflation is anticipated to hover around 6% for the time being, while it cannot be ruled out that it may eventually reach 7%. A further increase in the policy rate by the Bank of Korea this month is likely as a result of growing inflationary pressure.
A Bank of Korea official last week announced that if consumer prices rise by 6% or more, the likelihood of a big-step rate hike will rise.
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