Choo Kyung-ho: "Inflation Rate Over 4% After Q1, Drops to 3% Range in Second Half"

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kim Hyewon] On the 23rd, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said, "As we slowly pass through the first quarter, we will likely see inflation rates in the 4% range, and in the second half of the year, inflation will be in the 3% range."

Deputy Prime Minister Choo appeared on YTN News24 that day and said, "Public utility fee increases are pending, and upward pressure on inflation remains high," but added, "Over time, inflation will gradually stabilize."

Regarding future interest rate levels, he said, "We have no choice but to raise interest rates to some extent to respond to inflation," but also noted, "However, as rates rise sharply, voices are growing louder that this could severely impact ordinary citizens and the general economy. The Financial Monetary Policy Committee of the Bank of Korea will comprehensively consider these aspects and proceed accordingly."

On real estate loan regulations, he stated, "In recent years, overly punitive regulations such as low loan-to-value (LTV) and debt-to-income (DTI) ratios have been somewhat eased to better reflect reality," emphasizing, "However, overall debt service ratio (DSR) regulations will be maintained for the time being during this process."

Deputy Prime Minister Choo expressed concern, saying, "The total household debt has reached a level that must be carefully monitored, and if household loans are loosened recklessly, repayment ability could become an issue later, potentially leading to systemic national risks." However, he added, "For low-income real demand borrowers and those without homes, when purchasing a house to own, DSR regulations will be excluded, and only DTI and LTV regulations will be eased and applied."

Regarding exports, he said, "The semiconductor industry is going through its worst phase," and added, "The entire government plans to establish various strategies to revitalize exports and will focus intensively on this effort."