[Economic Schedule] How Much Will Fuel Tax Be Reduced... Q3 GDP Growth Rate Also Announced

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[Asia Economy Reporter Joo Sang-don] The government will announce measures to ease inflationary pressures, including a reduction in fuel tax, within this week.

On the 22nd, Lee Ok-won, the 1st Vice Minister of the Ministry of Economy and Finance, officially announced at the policy review meeting and the vice ministers' meeting on inflation that "fuel tax will be temporarily reduced."

Vice Minister Lee explained, "We will promptly finalize specific plans such as the extent and timing of the fuel tax reduction and announce the details at the emergency economic central disaster and safety countermeasure headquarters meeting next week."

The government previously reduced fuel tax by 10% in 2008, and by 15% and 7% during 2018-2019. The legal limit for fuel tax reduction is 30%. Under the current circumstances, a plan to reduce it by 10-15% during the winter season is being discussed.

The Bank of Korea will announce the preliminary real Gross Domestic Product (GDP) growth rate for the third quarter of this year (quarter-on-quarter) on the 26th. The GDP in the second quarter increased by 0.8% compared to the first quarter, supported by a recovery in private consumption.

The quarterly growth rates recorded negative figures in the first (-1.3%) and second (-3.2%) quarters of last year when COVID-19 occurred, but then continued positive growth in the third (2.2%), fourth (1.1%), first (1.7%), and second (0.8%) quarters of this year.

Attention is focused on whether the upward trend continued in the third quarter despite the fourth wave of COVID-19, and whether the growth rate is sufficiently high to support the 4% growth target for this year.

The Bank of Korea will consecutively release the results of the "October Consumer Sentiment Survey" on the 27th and the "October Business Survey Index (BSI)" on the 29th.

In September, the Consumer Confidence Index (CCSI) rebounded after three months, but the BSI fell compared to August. It is of interest how consumer and corporate sentiment in October was affected by concerns over COVID-19, inflation, and rising oil prices.

Measures to supplement household debt management will also be announced. On the 20th, at the National Assembly's Planning and Finance Committee audit, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki stated, "The supplementary measures for household debt are in the final review stage," adding, "Overall, it will include total volume management and strengthening regulations on the Debt Service Ratio (DSR)."

To prevent a balloon effect where loans shift to the secondary financial sector due to DSR regulations, it is expected that a uniform DSR of 40% will be applied across both primary and secondary financial sectors.

The Statistics Korea will announce the industrial activity trends for September on the 29th. There is interest in how the fourth wave of COVID-19 has impacted the real economy.

In August, production, consumption, and investment all decreased simultaneously for the first time in three months. In particular, service industry production, which was hit hard by COVID-19, turned to a decline after three months, and manufacturing production also decreased in tandem.