Korea's GDP growth may shed 0.45 percentage point if oil prices stay high: Citibank
Oil prices are displayed at a gas station in Seoul, Monday. Yonhap
Korea's gross domestic product (GDP) growth for 2026 could fall by nearly 0.5 percentage point should oil prices remain high in light of alarming geopolitical developments in the Middle East, a report showed Tuesday,
According to the report published by Citibank, analyst Kim Jin-woo projected Korea's GDP growth rate to fall by 0.45 percentage point this year if oil prices stay above an average of $82 per barrel.
The bank's base case for Brent oil prices, the international oil benchmark, was $62 per barrel for the remainder of the year.
With the same assumption, the report expected Korea's consumer price index (CPI) inflation to rise by 0.6 percentage point and the country's current account balance for the year to fall by 2.25 percentage points.
Such an assessment comes in the wake of a jump in oil prices amid intensifying Middle East geopolitics following the United States' air strikes against Iran over the weekend.
Brent crude futures closed nearly 7 percent higher at $77.74 per barrel on Monday, the first trading day after the U.S. and Israel launched large-scale military operations against Iran.