South Korea Inflation Rises to 2.2% in March Amid Surge in Global Oil Prices

South Korea Inflation Rises to 2.2% in March Amid Surge in Global Oil Prices​

Seoul, April 2: South Korea’s consumer price inflation accelerated to 2.2 percent year-on-year in March, exceeding the government’s 2 percent target, as rising global oil prices driven by prolonged Middle East tensions pushed fuel costs higher, according to official data released on Thursday.

The latest reading marks the fastest inflation growth since December, when consumer prices had risen 2.3 percent annually, highlighting renewed price pressures in the economy.

Fuel Prices Lead Inflation Spike​

The primary driver behind the increase was a sharp rise in petroleum product prices, which climbed 9.9 percent year-on-year, the steepest jump since October 2022.

• Diesel prices surged 17 percent
• Gasoline prices increased 8 percent

Officials attributed the sharper rise in diesel prices to its broader use in transportation and logistics compared to gasoline, which is mainly used in passenger vehicles.

Middle East Tensions Disrupt Oil Supply​

The surge in global oil prices has been linked to supply disruptions after the Strait of Hormuz was effectively closed following U.S. Israeli strikes on Iran in late February. The disruption has significantly impacted energy-import-dependent economies like South Korea.

Food Prices Show Mixed Trend​

Prices of agricultural, livestock, and fishery products showed mixed movement:

• Overall category declined 0.6 percent
• Agricultural product prices fell 5.6 percent
• Livestock prices rose 6.2 percent
• Fishery prices increased 4.4 percent

The decline in agricultural prices helped partially offset the broader inflationary pressure.

Service and Processed Food Prices​

Service prices increased 2.4 percent year-on-year, largely due to higher insurance costs.

Meanwhile, processed food price inflation eased to 1.6 percent, down from 2.1 percent in February, marking the slowest growth since November 2024.

• Sugar prices fell 3.1 percent
• Flour prices declined 2.3 percent

Core Inflation Remains Stable​

Core inflation, which excludes volatile food and energy prices, stood at 2.2 percent in March, indicating underlying price stability despite fluctuations in fuel costs.

Government Response​

Authorities stated that the rise in consumer prices was partly contained by the fuel price cap system and reiterated their commitment to stabilizing inflation amid ongoing global volatility.