SEOUL, South Korea: A Bank of Korea survey of consumers released this week showed that South Koreans expect inflation to average around 3.1 percent over the next 12 months, the highest rate in nine years, primarily due to rising global energy prices.
The survey also found that consumers are expecting higher borrowing costs, confirming market views that the central bank would further raise interest rates, which already have been hiked four times since August.
“The survey index partly reflects a lagging effect from recent price rises, but this finding will surely influence policy makers at the central bank,” said Moon Hong-cheol, economist at DB Financial Investment, as quoted by Reuters.
The central bank’s March survey found median inflation expectations for the coming year was 2.9 percent, and its April 2022 reading was the highest since April 2013, when inflation hit 3.1 percent.
Last week, the International Monetary Fund (IMF) increased its prediction for South Korea’s 2022 annual inflation from 3.1 to 4.0 percent.
The consumer sentiment index, based on a survey of 2,500 households conducted between April 12 and 19, rose to a 3-month high of 103.8 from 103.2 in March, standing above the 100-point threshold for a 14th consecutive month.
