Inflation in Korea: highest in a decade

South Korea Inflation Rate Hits Over 13-Year High (source: tradingeconomics)

Since April 2022, prices of various products in South Korea have dramatically risen due to an unfortunate turn of events. Food and energy prices have soared by a staggering 4.8% compared to last year, marking the highest overall price inflation rate since 13 years ago, in 2008.

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Why this is happening: Not only South Korea but the entire world has gone through two devastating threats to economic growth and trade connections, leading to an eventual surge in prices.

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1. The COVID-19 pandemic has significantly decelerated the rate of globalization, impacting not only trade but also forcing many smaller businesses to close.

2. The Russo-Ukrainian War has led to a significant depletion in the food and agriculture industries. As Russia and Ukraine were primary sources of a wide range of foods, the war has dramatically slowed food production and caused numerous struggles in meeting consumers’ demands.

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One observation: The effects of inflation on our society were amplified by the approaching scarcity of materials due to global warming and climate change. The combination of three factors (the pandemic, the war, and global warming) has created a leap in costs that worries many low-income families.

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Why you should care: Learning about this economic issue now can benefit us in other, similar situations where we have to think about the impacts of our actions and make the most out of what we have.

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• It is important to be aware of the monetary changes in South Korea and to learn to be mindful of our spending.

• We should spend money conscious of the differences in prices and consider the implications of our purchase beforehand.
  
   

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