The recent U.S. attack on Iran has thrown cold water on Korea’s efforts to shift economic momentum. Rising international oil prices are fueling inf...
The recent U.S. attack on Iran has thrown cold water on Korea’s efforts to shift economic momentum. Rising international oil prices are fueling inflationary pressures at home while raising concerns over a logistics crisis and increased production costs.
The KOSPI, which recently rebounded past the 3,000 mark for the first time in three and a half years, is now facing renewed volatility. There are also growing fears that the economic boost expected from a supplementary budget may be offset. On June 22, the Ministry of Economy and Finance held an emergency meeting to discuss its response. The government’s top concern is international oil prices. With its high dependence on overseas energy, Korea is particularly vulnerable to oil price hikes, which tend to drive up domestic inflation. Brent crude futures, for example, surged from $74.23 per barrel on June 13 , the day of the Israeli strike on Iran, to $77.01 by the 20th. Gasoline prices in Seoul also rose to over 1,721 won per liter on the 21st. Typically, domestic fuel prices follow international oil prices with a 2 to 3 week lag. Korea Investment & Securities warned in a report published on the 17th that “if oil prices climb to around $100 per barrel by July and remain 20 percent higher year-on-year, Korea’s consumer inflation could rebound to the high 2 percent range in the fourth quarter.” Concerns over supply chain disruptions are also mounting. Shipping costs for vessels passing through the Strait of Hormuz could spike, and in a worst-case scenario where the strait is blocked, a global energy supply crisis would be inevitable. Roughly 20 percent of the world’s oil consumption flows through the Strait of Hormuz. Financial markets are expected to see short-term turbulence as well. After steadily rising since the presidential election on June 3, the KOSPI closed at 3,021.84 on June 20, breaching the 3,000 level for the first time in 3.5 years, but may now pause for breath. If the conflict escalates, demand for safe-haven assets like the U.S. dollar is likely to rise, weakening the Korean won. Korea Investment & Securities predicted that “if the situation develops into a full-scale war, the won-dollar exchange rate could exceed 1,400 won.” 경제 많이 본 기사 The war adds to the burden amid an already slowing export environment. While the Middle East is not one of Korea’s major export destinations, global trade may still suffer due to mounting uncertainties in the global supply chain. The heightened risk of stagflation, a combination of inflation and economic stagnation, in the U.S. due to the war is also a contributing factor to the slowdown in Korea’s exports to the U.S. The government's plan to stimulate the economy through a second supplementary budget may also be disrupted. If inflationary pressure intensifies, the Bank of Korea could delay its anticipated interest rate cuts. Kim Kwang-seok, head of economic research at the Institute for Korean Economic and Industry, warned, “If uncertainty continues to grow, companies will scale back on new investments and business expansion, significantly offsetting the impact of the supplementary budget.” On the same day, First Vice Minister Lee Hyung-il, acting as Minister of Economy and Finance, instructed relevant agencies to “implement necessary measures swiftly in close inter-agency coordination should any unusual developments arise.” ※This article has undergone review by a professional translator after being translated by an AI translation tool. 한글기사 원본
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Identity and face of Hungarian bomb expert who aided Korean independence movement finally revealedThe true identity and face of the Hungarian man known as “Magyar,” who famously supported the Korean independence movement during the colonial era ...
Read more »
동덕여자대학교 ‘2025년 서울시 지역혁신중심 대학지원체계(RISE)’ 사업 주관대학으로 선정동덕여자대학교(총장 김명애)는 서울시와 교육부가 공동으로 추진하는 '2025년 서울시 지역혁신중심 대학지원체계(RISE)' 사업에 주관대학으로 선정돼 총 2개 단위과제를 수행하게 됐다. 이 사업은 △글로벌 대학 경쟁력 강화 △서울 전략산업 기반 강화 △지역사회 동반성장 △평생·직업교육 강화 △대학창업 육성을 목표로 5대 프로젝트, 12개 단위과제로 구성되어 있다. 이를 위해 에셋 매니지먼트 RISE 아카데미, 회계·세무관리 RISE 아카데미, 융복합 디자인 RISE 아카데미, 시니어 웰에이징 RISE 아카데미 과정을 개설할 예정이다.
Read more »
107-year-old forced labor victim wins Mitsubishi compensation ruling after 80 yearsA Korean court has ruled that 107-year-old Kim Han-soo, a victim of forced labor during Japan’s colonial rule, is entitled to 100 million won in co...
Read more »
Korean original musical ‘Maybe Happy Ending’ wins 6 Tony Awards, including Best MusicalThe Korean original musical “Maybe Happy Ending,” which was born in Seoul’s Daehangno district, won six awards, including Best Musical, at the Tony...
Read more »
KB Capital's 'RISE Hydrogen Economy ETF' Surges 64.83% in 6 Months, Dazzling InvestorsKB 자산운용의 'RISE 수소경제 테마 ETF'가 6개월 동안 64.83%의 수익률을 기록하며 국내 상장 친환경 테마 ETF 중 최상위 순위를 차지하며 주목받고 있습니다. 글로벌 친환경 정책 강화 및 미국과 한국의 주요 수소 연료전지, 인프라 기업 주가 급등이 이에 기여했습니다.
Read more »
Korean rice exports to Japan poised to hit 1,000 tons amid Japanese rice shortageEarlier this month, the Heunghae branch of the National Agricultural Cooperative Federation (Nonghyup) in Pohang, North Gyeongsang Province, export...
Read more »