As the war between the U.S. and Israel against Iran shows signs of prolonging, global oil prices and currency exchange rates are surging simultaneously. As of the recent reports, the won-dollar exchange rate rose to 1495.5 KRW, marking the highest opening since the global financial crisis in March 2009, with projections possibly hitting 1550 KRW. This spike has been attributed to fluctuating global oil prices, with Brent crude reaching over $109 per barrel, impacting South Korea's economy heavily reliant on oil imports.

The combination of high oil prices and currency rates is exerting upward pressure on prices, resulting in concerns about stagflation—where inflation rises alongside economic stagnation. Rising import prices, raw material costs, and logistics fees are driving up production costs for businesses, which are expected to be passed on to consumers. If the conflict in the Gulf persists, it may jeopardize the government's projected economic growth rate of 2.0% for the year, adding uncertainty to the overall economic outlook.

The implications of these rising costs are significant, as they not only dampen consumer spending but also adversely affect domestic consumption, which has been a primary driver of economic growth. Although South Korea's export dependency on the Middle East is limited, the increased energy and logistics costs could impose added burdens on export businesses. The Korea International Trade Association estimates that a 10% increase in global oil prices could lead to a 0.39% decrease in Korean exports, indicating that prolonged conflict could reduce global trade volumes overall, greatly affecting South Korea's economic stability.