[Economy 365]

An analysis has indicated that if the situation in the Middle East worsens and high oil prices persist through the first half of next year, South Korea's economic growth rate could drop while inflation rises further.

The National Assembly Budget Office analyzed a "worsening scenario" in which international oil prices exceed USD 110 per barrel in the fourth quarter of this year and remain above USD 95 through the first half of next year.

Under this scenario, next year's economic growth rate is estimated to be 0.16 percentage points lower than the baseline scenario—where oil prices average USD 76.7 per year—while the consumer price inflation rate is projected to rise by 0.32 percentage points.

The trade surplus is also analyzed to decrease by USD 17 billion compared to the baseline outlook.

This is because South Korea relies on the Middle East for more than 70 percent of its crude oil imports.

Even for this year, the growth rate is projected to fall by 0.06 percentage points, the inflation rate to rise by 0.12 percentage points, and the trade surplus to shrink by USD 6 billion.

*This article was produced with AI audio.