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Import prices rose 44.6 percent year-on-year in May (in South Korea’s won; the increase was by 27.6 percent if calculated in terms of dollars), compared to 31.3 percent in April, due to high energy prices and a weakening won, the Bank of Korea announced June 13. This is the largest jump since the 49 percent recorded in March 1998. Inflation, meanwhile, sits at a seven-year high of 4.9 percent, far above the central bank’s target of 2.5 percent to 3.5 percent.
South Korea is among the most vulnerable of Asia’s top economic players to global price increases due to its heavy reliance on imports for many of life’s basic essentials — including oil, wheat, corn and coarse grains. At least 96 percent to 100 percent of its annual consumption in each of these items is imported. With global supplies in these basic necessities set to tighten, South Korea’s inflation and the associated social unrest can only rise. (Protests in South Korea can draw hundreds of thousands of marchers.)
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