Data released by the Bank of Korea on Wednesday showed that import prices in March recorded the largest increase in 28 years, driven by rising global oil prices due to conflict in the Middle East.
Preliminary figures from the central bank indicated that the import price index rose 16.1% month-on-month in March, a significant acceleration from the 1.5% increase seen in February.
This marks the sharpest rise since January 1998, when prices increased by 17.8%. It also represents the ninth consecutive monthly increase in South Korea's import prices since July 2025.
On an annual basis, the import price index climbed 18.4% in March.
Amid Middle Eastern tensions, South Korea's benchmark crude oil price surged 87.9% month-on-month in March, reaching $128.52 per barrel. The conflict has severely disrupted global oil supplies, and South Korea is heavily dependent on energy imports.
A central bank official stated, "In terms of the Korean won, the import price of crude oil rose 88.5% month-on-month, the largest increase on record."
"Uncertainty surrounding the Middle East situation remains high. Even if the conflict ends, disruptions in raw material supply are unlikely to be fully resolved in the short term," the official added.
Furthermore, the weakening of the Korean won against the U.S. dollar, also influenced by the Middle East crisis, contributed to the rise in import prices. The average exchange rate in March was 1,486.64 won per dollar, compared to 1,449.32 in February.
In March, raw material prices increased 40.2% month-on-month, while prices of intermediate goods rose 8.8%.
Import prices are a major driver of inflation, as they affect production costs and consumer prices throughout the supply chain.
The data also revealed that South Korea's export price index rose 16.3% month-on-month in March, the largest increase since January 1998, when it climbed 23.2%.
Year-on-year, the index surged 28.7%.
The central bank official noted, "Rising export prices have also been fueled by higher global oil prices, particularly sharp increases in petroleum product prices. Price hikes in computers, electronics, and optical equipment, especially semiconductors, have also contributed to the rise in export prices."
Comments