Inflation fears mount amid wildfires and tariffs

Last month, I was shocked that my apartment maintenance fee had risen by 140,000 won compared to the previous year. Online community boards were flooded with complaints about monthly fees increasing by over 100,000 won. With district heating and gas rates climbing, along with rising labor and material costs that have driven up cleaning fees and long-term repair reserves, apartment maintenance costs—often seen as a barometer of everyday inflation—have soared to a new level.

And it’s not just maintenance fees. Prices of everyday essentials like coffee, bread, cakes, instant noodles, dumplings, hamburgers, ice cream, and beer have all seen hikes. More than 40 food and restaurant companies have raised prices this year alone, often citing the strong U.S. dollar and rising raw material costs. South Korea’s consumer price inflation rate, which dropped to 1.3% last October, rose to 2.1% in March, marking the third consecutive month above 2%. Processed food prices alone rose by 3.6%.

Several looming factors could drive inflation even higher. Wildfires that swept through South Gyeongsang and North Gyeongsang Provinces last month devastated orchards and farmland, severely damaging agricultural output in the region. About 9% of South Korea’s apple cultivation area was affected. Prices for apples, cabbage, onions, garlic, and even domestic beef could be significantly impacted.

Tariff tensions with the United States are another inflationary threat. In what’s been dubbed “worse than the worst-case scenario,” South Korea faces the steepest tariff rate—25%—among countries with free trade agreements with the U.S. This will inevitably hurt Korean exports. If the Trump-era tariffs trigger financial market volatility and further weaken the won, import prices may also rise.

Even though the headline inflation rate remains in the 2% range, complacency is dangerous. The cost-of-living index has already risen by 2.4%, outpacing the general consumer price index. Persistent inflation disproportionately affects low-income households. Despite the situation, perhaps due to the 111-day-long political turmoil over former President Yoon Suk Yeol’s impeachment, the government, both internally and externally, shows little sign of urgency or awareness of the inflation crisis. There’s growing public discontent that food and dining companies, once wary of public scrutiny, are exploiting the leadership vacuum to raise prices freely.

Timing is everything in economic policy. Missed opportunities come with higher costs. In the past three months alone, 270,000 small business owners have shut down. Meanwhile, usage of cash advance services from credit card companies—a last resort for many—has surged to a three-year high, and delinquency rates have climbed above 3%. These are flashing red lights signaling distress in the real economy.

Although the Constitutional Court’s ruling on former President Yoon’s impeachment has resolved some political uncertainty, the country now faces another hurdle: a snap presidential election. Until a new administration takes office, all government ministries must cooperate to stabilize inflation and protect vulnerable households. This is the most urgent mission for the current economic team. With domestic consumption sluggish and global markets roiled by tariff battles, the government cannot afford to neglect the livelihoods of ordinary citizens under the excuse of political transition.