Bank of Korea headquarters in central Seoul (Yonhap)
South Korea is expected to be under rising inflationary pressure for a longer-than-predicted period due to the ongoing global supply disruptions and recovering consumption backed by eased antivirus rules, the country's central bank said Wednesday.
"Our country needs to closely watch the possibility of a longer-than-expected period of an upward trend in high prices due to the local ramifications from the global supply bottleneck, an increase in consumption from changes in antivirus measures and other factors," the Bank of Korea (BOK) said in a report.
The central bank said the impact from the current global supply disruptions of raw materials has been limited for South Korea at the moment, but the situation could become a serious challenge should it be prolonged.
The BOK cited rising home prices as another factor putting upward pressure on inflation, along with the possibility of a rebound in consumption bolstered by the planned shift to normalcy from tight virus curbs.
BOK Gov. Lee Ju-yeol recently said that inflation remains in the upper range of 2 percent due to both supply- and demand-side pressure, and is expected to stay over the central bank's targeted range of 2 percent for the time being.
The BOK earlier kept the rate unchanged at 0.75 percent for October, though it left open the possibility of another rate hike next month following a quarter percentage-point hike in August. (Yonhap)