Despite Interest Rate Hikes, Prices Keep Soaring... Government Forecasts Inflation Rate in the 5% Range This Month

Early Next Week, Announcement of 'Minsheng Stability Measures'

Bang Gi-seon, First Vice Minister of Strategy and Finance, is presiding over the 2nd Economic Relations Vice Ministers' Meeting held at the Government Seoul Office Building on the morning of the 26th. 2022.5.26 [Photo by Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] The government has turned on a 'preliminary warning light' that consumer price inflation could soar to the 5% range this month. In this regard, a livelihood stabilization plan is scheduled to be announced early next week.

Bang Ki-seon, First Vice Minister of the Ministry of Economy and Finance, chaired the '2nd Economic Ministers' Meeting' at the Government Seoul Office on the 26th, stating, "Inflation is spreading worldwide due to global supply chain instability, the prolonged Russia-Ukraine conflict, and demand recovery after COVID-19," adding, "Some forecasts suggest that the consumer price inflation rate for May, to be announced next week, will exceed April's level (4.8%, year-on-year) and reach the 5% range."

Domestic consumer prices rose 4.1% in March for the first time in over a decade, and the increase expanded to 4.8% last month. The last time the inflation rate recorded a 5% range was in September 2008 (5.1%).

Vice Minister Bang said, "Protecting people's livelihoods from inflation is the top priority task for the economic team right now," emphasizing, "Efforts to stabilize living costs, especially food and dining prices that most directly affect the public, and to reduce living expenses such as housing and education costs are urgent." He continued, "We are preparing a livelihood stabilization plan focusing on tasks that can be implemented immediately," and added, "We will swiftly conclude inter-ministerial consultations and announce the plan early next week."

Vice Minister Bang stressed, "Starting with the livelihood stabilization plan, we will continuously identify and promptly implement livelihood-related tasks with high public impact," and said, "We will make every effort to manage raw materials and international grain supply to prevent external factors from transferring inflationary pressure domestically, and we will not neglect efforts to strengthen food security, such as establishing a self-sufficiency base for major grains and securing stable overseas supply chains." He also added, "We will also devise structural price stabilization measures, including advanced distribution and logistics and establishing a fair market competition order."

At the meeting, price stabilization tasks in sectors such as agriculture, livestock, fisheries, energy, and telecommunications, identified by each ministry after the first price-related vice ministers' meeting, were discussed intensively. Related follow-up tasks will be identified and implemented.

Vice Minister Bang said, "We are thoroughly preparing so that livelihood and price stabilization projects worth 3.1 trillion won can be executed immediately upon parliamentary approval," and earnestly requested the National Assembly, "Considering the difficult livelihood conditions, we sincerely urge the prompt passage of the supplementary budget bill."