Experts Forecast Financial Shock Within a Year

A growing number of analysts expect the Korean economy to experience a financial shock in the short term, according to the Bank of Korea on Monday.

The BOK conducted a risk survey for the first half of this year, which showed that about one-third of 80 financial and economic experts predicted a "high" chance of a shock within a year.

In the same poll in the second half of 2021, about one-ninth predicted a crash of some kind.

Since 2012, the BOK has conducted the survey twice a year asking 80 economics professors and domestic and foreign financial experts about potential risks facing Korea's financial system.

About one-third cited as the biggest risk inflation stemming from rising global raw material prices and supply chain disruptions, followed by 12 experts who cited an end to tapering by major economies and nine who named sky-high household debt.

Signs of inflation are becoming apparent around the world. Consumer prices increased around eight percent in the U.S. in March and April, the first consecutive monthly increase of that size in 41 years. The producer price index in China had increased by more than eight percent for 12 straight months as of April due to supply disruptions and coronavirus lockdowns.

Just over half of the experts had a positive outlook for Korea's financial stability.