S&P "Inflation Will Expand Further"... South Korea's Inflation Rate to Reach 5.0% This Year

[Asia Economy Reporter Hyungsoo Park] The international credit rating agency Standard & Poor's (S&P) has projected South Korea's inflation rate for this year at 5.0%.

In its Asia-Pacific Q3 economic outlook report published on the 4th, S&P predicted that "inflationary pressures are expected to expand further due to rising energy and raw material prices."

S&P analyzed that until May, inflation in countries including South Korea, Australia, India, New Zealand, the Philippines, and Thailand exceeded the upper limits of the targets set by their respective central banks. This is the reason why central banks in these countries have begun normalizing monetary policy.

Consumer price inflation in South Korea and Australia was recorded as not rising as much as in the United States and Europe. Inflationary pressures began to strengthen as domestic demand recovery after COVID-19 became gradual.

S&P projected South Korea's inflation rate for next year at 2.4%, with forecasts for 2024 and 2025 at 1.8% and 1.6%, respectively.

The economic growth rate forecast for South Korea this year was set at 2.6%, which is 0.1 percentage points higher than the 2.5% projected in April.

S&P explained, "Although export momentum has weakened, domestic demand is generally fully recovering from the impact of COVID-19," adding, "Overall growth has not significantly slowed down."