SEOUL, 8th June, 2022 (WAM) — The Organisation for Economic Cooperation and Development (OECD) on Wednesday sharply raised its 2022 inflation outlook for South Korea to a 24-year high of 4.8 percent, citing soaring energy costs amid the protracted war between Russia and Ukraine, according to Yonhap.
The Paris-based organisation’s latest projection marked a 2.7 percentage-point hike from its December estimate of 2.1 percent. It also revised up its 2023 inflation outlook for the nation to 3.8 percent from 1.5 percent.
The OECD’s 2022 estimate would mark the fastest on-year rise since 1998, when South Korea’s inflation soared 7.5 percent.
The projection is higher than the Bank of Korea (BOK)’s 4.5 percent estimate and the International Monetary Fund (IMF)’s 4 percent forecast. The BOK aims to keep annual inflation at 2 percent over the medium term.
The OECD also cut its 2022 growth outlook for the South Korean economy to 2.7 percent from its earlier forecast of 3 percent and lowered next year’s growth forecast for Korea to 2.5 percent from 2.7 percent.
The BOK and the IMF expected Asia’s fourth-largest economy to expand 2.7 percent and 2.5 percent, respectively, in 2022.