SEOUL (April 2): South Korea's inflation picked up less than expected in March as the government capped fuel prices, but policymakers and economists warned that risks remain tilted to the upside with oil prices surging past US$100 a barrel driven by the Iran war. Asia's fourth-largest economy, which is also the world's fourth-largest importer of oil, introduced last month nationwide fuel prices caps for the first time in nearly 30 years. Prices of petroleum products jumped 10.4% over the month, but agricultural products fell 3.0% due to an increase in supply. "Fuel prices, even if kept at the levels seen in March, will raise annual inflation over 2.5%, so upward revisions to inflation forecasts are inevitable," Lee said, also noting rising airfare while higher fertiliser costs were squeezing agricultural prices. The central bank, which targets 2% inflation over the medium term, projected inflation at 2.1% this year in February, based on assumptions of US$64-a-barrel oil prices — assumptions since upended by the war.

Source: The Edge Markets April 02, 2026 03:01 UTC