South Korea

고환율에 안잡히는 물가 ‘초비상’…11월 소비자물가 2.4% 쑥

Maekyung | Local Language | News | Dec. 4, 2025 | UndeterminedInflation

In November, consumer prices in South Korea rose by 2.4% year-on-year, matching the increase seen in October. This rise follows an inflation rate that dipped to 1.7% in August but has since remained above 2% for three consecutive months. Significant price surges were noted in petroleum products (5.9%) and agricultural, livestock, and fisheries products (5.6%), which are particularly sensitive to the weakened won. The won has hovered in the mid-1,400s against the dollar, pushing up import prices and contributing to sustained inflation.

The persistent depreciation of the won has led to a “threefold burden” on households: high exchange rates, high inflation, and rising interest rates. Market interest rates have increased by over 0.5 percentage points in the past three months, despite the Bank of Korea’s base policy rate expected to remain unchanged for an extended period. This dynamic creates a cycle where currency weakness drives up prices and lending rates, squeezing household finances.

Government measures, including issuing consumption coupons, have not prevented a decline in real household consumption, partly due to a 14.3% increase in average monthly household interest costs in the third quarter of the year. Without intervention, this trend threatens to worsen household financial conditions in the coming months. Experts emphasize the need to address the root cause—the high exchange rate—by attracting foreign investment and easing corporate regulations, rather than focusing solely on financial sector revitalization.

Hankyoreh - E | English | News | Dec. 4, 2025 | North Korea

A former South Korean soldier from the Defense Psychological Operations Group revealed that South Korea initiated the propaganda balloon launches into North Korea in late 2023, contradicting official claims that North Korea’s trash balloons provoked their actions. The soldier, who served in 2023 and 2024, explained that the unit began actual balloon launches in October 2023 following a Constitutional Court decision that lifted a ban on leaflet distribution. These operations involved launching large, hydrogen-filled balloons carrying leaflets and occasional electronic devices into North Korea, timed carefully according to wind conditions and targeted at strategic locations.

The whistleblower described the launches as secretive, with operations kept hidden even from the Joint Chiefs of Staff and frontline units, causing confusion and endangering South Korean forces due to lack of coordination. Despite risks and internal concerns about provoking North Korea and escalating tensions, the unit continued frequent launches without internal calls for caution. The soldier expressed regret, noting that the propaganda efforts were reckless provocations that escalated tensions and contributed to the subsequent martial law declaration in December 2024. President Lee Jae Myung later halted the loudspeaker broadcasts, leading North Korea to cease theirs as well.

Yonhap | English | News | Dec. 4, 2025 | North Korea

The South Korean unification ministry's 2026 budget for inter-Korean cooperative projects has surpassed 1 trillion won (US$681.4 million) for the first time in three years. The National Assembly approved a total budget of 727.9 trillion won for 2026, with 1.24 trillion won allocated to the unification ministry, reflecting a 20.9 percent increase from the current year. Of this amount, 1.002 trillion won is dedicated to the inter-Korean cooperation fund as part of efforts to revive stalled exchanges and economic projects with North Korea.

Additionally, the 2026 budget includes funding for a "center for peaceful coexistence on the Korean Peninsula" in Seoul, intended to promote public understanding and support for inter-Korean exchanges and peace. The project has been allocated 12.3 billion won for next year, with a total investment of 39.6 billion won planned through 2030. Another 480 million won is budgeted to develop a tourist zone along the Demilitarized Zone, aiming to transform it into an inter-Korean cooperative area over time.

President Lee Jae Myung has renewed peace overtures, proposing the restoration of communication channels with North Korea as a foundation for peaceful coexistence. Despite these efforts and calls for dialogue from Seoul, Pyongyang has yet to respond.