SEOUL– South Korea faces greater chances of shocks that could cause a short-term crisis in the financial system than six months earlier due mainly to high inflation, a central bank poll showed Monday.
According to the semiannual survey by the Bank of Korea (BOK), 26.9 percent of 80 experts at home and abroad said the possibility of the country experiencing “shocks that could cause a crisis in the financial system” within a year or so remains high or very high.
It has more than doubled from six months earlier when 12.5 percent of the polled said the same thing.
But the rate of the respondents who expected such risks in one to three years inched down to 32.9 percent from 36.1 percent six months prior.
Some 96.2 percent also expected the country’s financial system to be stable over the next three years.
The experts pointed to high inflation as the No. 1 risk factor, with 34.2 percent citing it as a primary concern.
Some 15.2 percent of the respondents pointed to “the normalization” of monetary policy by major economies as potential risks, followed by household debt with 11.4 percent and the rise in interest rates with 10.1 percent, according to the poll.
“It is needed to send a clear and consistent signal about the rollback of monetary expansion so as to slow down inflation growth and lower expected inflation,” the experts said according to the BOK.
In April, consumer prices spiked 4.8 percent on-year, the fastest increase in more than 13 years, over soaring energy costs and the post-pandemic recovery.
The central bank last week raised its 2022 inflation outlook to a 14-year high of 4.5 percent, from its previous 3.1 percent estimate.
Source: Yonhap News Agency