Inflation to Rise Further in May as BOK Warns of Oil-Driven Increase

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[Financial News] The Bank of Korea (BOK) warned that inflation could rise further in May. As the impact of surging global oil prices begins to be fully reflected, upward pressure on prices is likely to continue for the time being.
According to the BOK, it held a price situation review meeting on the morning of the 6th, chaired by Vice Governor Ryoo Sangdai, to discuss recent inflation trends and the outlook ahead.
Consumer prices rose 2.6% in April from a year earlier. That was up 0.4 percentage point from March's 2.2%.
The biggest factor was petroleum products. Driven by higher global oil prices, the increase in petroleum product prices jumped from 9.9% in March to 21.9% in April, pushing overall inflation higher.
Living prices, which are closer to what consumers actually feel, rose 2.9%, sharply up from 2.3% in the previous month.
The BOK said inflation is likely to rise even further in May.
Petroleum product prices are already staying at a high level, and the base effect from last May, when agricultural, livestock and fishery product prices fell sharply, could add to the increase.
Still, the central bank said some factors may help cushion the pressure. Food prices have recently been relatively stable, and government measures to stabilize prices, including fuel tax cuts, are expected to play a partial buffering role.
The key variable for the inflation path ahead is global oil prices. In particular, with tensions in the Middle East remaining unstable, there are concerns that if oil price volatility widens, inflationary pressure could become stronger than expected.
The BOK said, "There is considerable uncertainty over how much the rise in petroleum product prices will spread to other items," adding, "We will closely monitor the inflation situation with vigilance."
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imne@fnnews.com Hong Ye-ji Reporter