SK: Oil spike may spur inflation next year

The rise in crude oil prices, and domestic demand caused by the country’s economic recovery, could fuel a sharp rise in consumer prices next year, the Bank of Korea warned yesterday. The bank said that next year, the inflation rate for consumer goods is likely to rise to around 3 percent from the 2.3 percent projected for this year.

Although the country’s consumer prices have increased at rates considered stable by the Bank of Korea so far this year, the central bank projected that inflation will pick up from the last quarter of the year.
The bank said that the coinciding of a sharp rise in oil prices and demand pressures, in addition to increasing grain prices, are likely to place upward pressure on consumer prices that will outweigh productivity gains.

The rapid rise in international crude oil prices caused the price of importing crude oil to rise to over $70 per barrel for the first time, and this will likely be directly reflected in consumer prices in the near future, the bank said.

Korea Herald