Korea braces for possible stagflation as soaring oil prices fuel inflation, dampen economic growth
Korea is facing a growing stagflation threat, as a surge in global oil prices coupled with a weakening currency pushes inflation higher, putting this year’s economic growth outlook of 2 percent under threat, market watchers said Monday. Stagflation is high inflation combined with slowing growth. The risk has been intensifying as international crude prices jumped above $100 per barrel for the first time in nearly four years, driven by escalating geopolitical tensions in the Middle East. Many warn the shock could ripple widely through Asia's fourth-largest economy, which remains highly dependent on imported energy and therefore particularly vulnerable to global commodity price swings. “The risk of stagflation is rising,” said Lee In-ho, former professor of economics at Seoul National University. “Rising oil prices can also weigh on global trade and disrupt logistics, creating headwinds for Korea’s export-dependent economy. Rising import prices can also shave off the country’s current account surplus.” At the same time, Lee warned that inflation driven by higher oil prices coul
