Organization: South Korea's inflation rate may continue to exceed the target of 2% in 2026.

Krystal Tan, an economist at ANZ Bank, stated that due to the increase in energy costs, South Korea's overall inflation rate this year may still be significantly higher than the country's central bank's target of 2%. In a report, she wrote that with the ongoing Middle East conflict leading to increases in oil prices and shipping premiums, it is currently expected that for most of 2026, the inflation rate will linger closer to 3% rather than 2%. She predicts that the Bank of Korea will raise interest rates by 25 basis points in the second half of the year to anchor inflation expectations. Prior to the escalation of the conflict in Iran, the inflation rate in February remained steady for the second consecutive month at the 2% target. Data for March will be released next Thursday.