How Middle East conflict is affecting S. Korea’s economy
the economic impact of heightened
geopolitical tensions in the Middle East
is being felt all around the world in
South Korea the effects are being seen
in the financial markets and oil prices
our economics correspondent munan tells
us
more as Iran and Israel traded direct
attacks against each other’s territory
for the first time the South Korean one
took a tumble against the US dollar
recent data has shown that they exchange
rate between the two currencies has
risen by over 7% this year exceeding the
rise seen during the financial crisis of
2018 last week International oil prices
shot up the global Benchmark Brent crude
oil surpassed $90 per barrel but oil
prices have been fluctuating this week
following Israel’s limited retaliatory
strikes causing traders to dismiss the
possibility of a sustained war between
the two sides South Korea’s Benchmark
Cosby index also saw a sharp decline
last Friday it dipped below the
2560 Mark for the first time since
February this comes as foreign investors
seek Safe Haven assets but one expert
says another big factor has been hook
remarks from Federal Reserve
officials for High Tech
Industries the interest rate is very
important for their investment plans so
with longer period of high interest
rates that they may scale back on their
investment plan plans and that’s showing
up in the stock prices of high-tech
Industries as the country’s economy is
showing some signs of recovery with the
$1 exchange rate this week less unstable
compared to immediately following the
attacks last week the government has
also extended the fuel tax cut by two
months to June as oil prices affect
headline inflation according to the
Federation of Korean Industries should
active conflict break out and crude oil
prices rise to over three digital per
barrel the rising consumer prices could
Rocket Up by more than 4% fuel tax cuts
could have a limited effect given that
the core inflation rate excluding food
and energy prices has been stable at
around 2.5% this year so this figure is
the lowest level since
20222 implying that the price level
excluding the Energy Products has
stabilized a lot during the last two
years so given that the price level has
come already stabilized a lot compared
to before we can expect that the effect
of the tax cut will be some
limited a ministerial economic meeting
on Thursday discussed how Supply chains
as a whole could be affected Finance
Minister chesang Muk described the
supply chain as fragile as thin ice and
highlighted the importance of a strong
supply chain that many of the country’s
high-tech sectors are reliant
on news
중동 위기로 치솟는 기름값… 환율•증시도 덩달아 ‘요동’
The economic impact of heightened geopolitical tensions in the Middle East is being felt all around the world.
In South Korea, the effects are being seen in the financial markets and oil prices.
Our economics correspondent Moon Hye-ryeon tells us more.
As Iran and Israel traded direct attacks against each other’s territory for the first time, the South Korean won took a tumble against the U.S. dollar.
Recent data has shown that the exchange rate between the two currencies has risen by over seven percent this year – exceeding the rise seen during the financial crisis of 2008.
Last week, international oil prices shot up – the global benchmark Brent crude oil surpassed 90 dollars per barrel.
But oil prices have been fluctuating this week following Israel’s limited retaliatory strikes, causing traders to dismiss the possibility of a sustained war between the two sides.
South Korea’s benchmark KOSPI index also saw a sharp decline – last Friday, it dipped below the 2-thousand-560 mark for the first time since February.
This comes as foreign investors seek safe-haven assets, but one expert says another big factor has been hawkish remarks from Federal Reserve officials.
“For high-tech industries, the interest rate is very important for their investment plans. With longer periods of high interest rates, they may scale back on their investment plans and that’s showing up in the stock prices of high-tech industries.”
The country’s economy is showing some signs of recovery, with the won-dollar exchange rate this week less unstable compared to immediately following the attacks last week.
The government has also extended the fuel tax cut by two months to June, as oil prices affect headline inflation.
According to the Federation of Korean Industries, should active conflict break out and crude oil prices rise to over three digits per barrel, the rise in consumer prices could rocket up by more than 4 percent.
Fuel tax cuts could have a limited effect, given that the core inflation rate excluding food and energy prices has been stable at around 2-point-5 percent this year.
“This figure is the lowest level since 2022, implying that the price level excluding energy products has stabilized a lot during the past 2 years. Given that the price level has already stabilized a lot compared to before, we can expect that the effect of the tax cut will be somewhat limited.”
A ministerial economic meeting on Thursday discussed how supply chains as a whole could be affected.
Finance Minister Choi Sang-mok described the supply chain as “fragile as thin ice,” and highlighted the importance of a strong supply chain that many of the country’s high-tech sectors are reliant on.
Moon Hye-ryeon, Arirang News.
#MiddleEast #Economy #Oil_prices #Exchange_rate #Stock #중동 #증시 #환율 #유가 #Arirang_News #아리랑뉴스
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2024-04-25, 21:00 (KST)