Seoul: South Korea is expected to continue facing elevated consumer prices despite the end of the Middle East conflict amid rising incomes following the boom in the technology industry, the central bank said Wednesday.

According to Yonhap News Agency, the Bank of Korea (BOK) report indicated that consumer prices are anticipated to "remain elevated for a significant period," highlighting that upward pressures persist despite progress in peace talks between the United States and Iran. South Korea's consumer prices increased by 3.1 percent in May compared to the previous year, amid global energy price volatility. This marks the fastest growth in 26 months, following a similar rise in March 2024.

The BOK pointed out that although the government has made strides in mitigating the impact of higher global oil prices on inflation, there is an expected gradual increase in upward pressure on public service charges. Additionally, the recent wage hikes in the technology sector are projected to influence other industries, potentially leading to further upward pressure on consumer prices.

The analysis was prompted by the substantial bonuses recently rolled out by South Korean tech firms, including Samsung Electronics Co. and SK hynix Inc., following record-breaking performances in the memory chip business amid the global artificial intelligence (AI) boom. In the latter half of 2026, the BOK projects consumer price inflation to linger around 3 percent, with core inflation, which excludes volatile food and energy prices, remaining in the mid-2 percent range.

The BOK also emphasized that rising costs due to higher crude oil prices and a weak Korean won are anticipated to impact the prices of products beyond petroleum goods. The central bank noted that during the energy price volatility caused by the war between Russia and Ukraine, higher crude oil prices had a spillover effect on non-energy products approximately six months later, with the impact persisting for about a year.