The South Korean Finance Ministry’s monthly assessment released on Friday painted a grim picture of the country’s economy due to skyrocketing oil and commodities prices caused by the protracted Russia-Ukraine war, local media reported.
Market volatility and global economic downside risks have increased due to the Federal Reserve’s accelerating monetary tightening and global supply chain disruptions, said Yonhap News Agency, citing the economic assessment report.
“Amid a continued buildup in price pressure, there are concerns about the economic slowdown due to sluggish investment and the weak recovery of exports,” the report said.
In May, the country’s consumer prices jumped by 5.4%, the highest rise in 14 years.
The government also lowered its 2022 economic growth outlook to 2.6% from its earlier 3.1% estimate in December, according to the report.
The ministry is concerned that the current situation could stifle the investment and export growth of the fourth-largest economy in Asia.
“It is hard to emphatically say the economy has entered the phase of a downturn, but the government has raised caution against a possible economic slowdown,” said Lee Seung-han, a ministry official, according to the agency.
Source: Anadolu Agency