S. Korea’s inflation will outpace economic growth rate in 2022: ADBNews
Inflation in South Korea is expected to exceed the country’s economic growth rate this year.
The Asian Development Bank’s growth outlook on Tuesday projects that price levels in the country will increase by 3.2% in 2022, but its gross domestic product is expected to increase by 3%.
While South Korea should see its consumption recover and its export volume increase,
the bank cut its previous GDP estimate by one point one percent, citing the rapid spread of Omicron and the ongoing war between Russia and Ukraine.
These factors are expected to put upward pressure on consumer prices, which are expected to remain above 4%, after hitting that level in March for the first time in more than a decade.
As the war in Ukraine hits global food and energy supplies, the Asian Development Bank cut the overall GDP estimate for 46 Asian economies to 5.2%, while raising inflation to 3.7%.
Other risks to the region’s recovery include the expected monetary policy tightening by the United States, which in the past has triggered massive capital flight from emerging capital markets, as well as currency depreciation. .
However, the bank expects the region to remain on the path of economic recovery from the pandemic as domestic demand picks up in Asian countries.
Oh Soo-young, Arirang News.