Korea to face 'grave' inflation risk for time being: official

First Vice Finance Minister Bang Ki-sun, center, speaks during the government's first vice-ministerial meeting on inflation at The Export-Import Bank of Korea in Seoul, May 20. Yonhap

Korea is expected to face a "grave" risk from rising inflation for the time being, as the recovery of consumption will further add price pressure amid high energy costs, a senior government official said Friday.

The government plans to beef up its monitoring of key items, including cooking oil and petroleum products, in a bid to ease the burden from elevated inflation, according to First Vice Finance Minister Bang Ki-sun.

"The prices situation facing the Korean economy is not good," Bang said at the government's first vice-ministerial meeting on inflation.

Korea's inflation has been under upward pressure due to a hike in fuel prices and a rebound in demand from the pandemic.

Consumer prices spiked 4.8 percent year-on-year in April, the fastest increase in more than 13 years. This followed a 4.1 percent rise in March.

As the lifting of COVID-19 social distancing rules in April is expected to spur private spending, it could exert upward pressure on prices of dining out and personal services, experts said.

The Korea Development Institute, a state-run think tank, revised its 2022 inflation outlook to 4.2 percent from its earlier estimate of 1.7 percent. (Yonhap)

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