Rising inflation has become a significant financial issue in South Korea. The public has raised concerns about how hard it has become to buy products recently as prices increase. In addition, it is becoming a large social issue that owner-operated businesses are struggling to stay open.

   According to the International Monetary Fund’s (IMF) global economic outlook, South Korea’s price growth rate this year was 2.6 %. In addition, the exchange rate continues to rise.

   There are various causes of rising prices and exchange rates. First, the instability of the world economy has caused Korea’s inflation to fluctuate sharply. The war between Ukraine and Russia has also destabilized global finance, and Korea’s economic growth forecast has fallen significantly. Russia’s suspension of gas supply in Europe is also expected to further destabilize the global economy. COVID-19 significantly contributed to increasing inflation as well by decreasing the amount of business in store fronts so much that many had to close their doors.

   As a result, Korea’s exchange rate has also risen significantly. Currently, the exchange rate in Korea is around 1,400 won compared to $1. Also, Korea’s trade balance recorded a deficit for six consecutive months for the first time in 25 years.

   The rising prices have made it difficult for citizens to live. Han Seung-min, who lives in Gyeonggi-do, said, “With the same money, I used to buy a meal, and now I can only buy a cup of coffee. I realize that prices are going up every day.”

   The IMF warns that the world economy could get worse next year and recommends strong countermeasures, saying that controlling prices is a priority. There are many other factors that hinder the growth of the Korean economy, such as unstable export rates and soaring interest rates.

   It is expected that the prices of products and inflation in South Korea will continue to rise. In line with this, there are growing calls for a consistent high interest rate stance.