Government Raises Voice Urging "Restraint in Price Hikes"... Will It Succeed in Controlling Inflation?

Statistics Korea to Announce February Consumer Price Trends on the 6th

As the government continues to pressure related industries to refrain from raising prices, Statistics Korea will announce the consumer price trends for February on the 6th.

According to Statistics Korea, consumer prices in the first month of the new year rose by 5.2% compared to the same month last year. The sharp increase in electricity and gas rates due to the surge in international energy prices had a significant impact. Electricity rates rose by 29.5%, city gas by 36.2%, and district heating costs by 34.0% compared to the same period last year. Attention is focused on whether the high inflation rate above 5% will continue in February.

Due to the rise in prices caused by public utility charges such as electricity rates, the consumer price inflation rate, which had gradually slowed down after peaking in July except for October last year, rose by 0.2 percentage points compared to December, returning to an upward trend. In response, the government has introduced a public utility rate freeze policy for the first half of the year. On the 15th of last month, President Yoon Suk-yeol chaired an emergency economic and livelihood meeting and said, "Public utility charges managed by the central government, such as roads, railways, and postal services, will be operated with a maximum freeze policy in the first half of the year, and local governments are also asked to work together to stabilize local public utility charges as a part of livelihood support."

Subsequently, on the 22nd of the same month, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho publicly sent a message to the liquor industry to refrain from price increases. At the plenary session of the National Assembly's Planning and Finance Committee, Deputy Prime Minister Choo said, "Including soju, these are items that our people enjoy very closely. Cooperation from all sectors is truly necessary."

The Ministry of Economy and Finance has launched a fact-finding investigation to examine whether the price increase factors claimed by the industry are valid. The National Tax Service has also indirectly urged the liquor industry to refrain from raising prices through communication.

In particular, Minister of Agriculture, Food and Rural Affairs Chung Hwang-geun requested the food industry to refrain from raising food prices in the first half of this year during a meeting with food company representatives on the 28th of last month.

In response to the government's efforts to curb inflation, the food industry is withdrawing price increases one after another. Initially, CJ CheilJedang planned to raise the wholesale prices of gochujang and seasoning products for convenience stores by up to 11.6% and noodle prices by 9.5% starting in March, but decided not to raise them. Hite Jinro officially announced a freeze on soju prices, and OB Beer decided not to raise prices for the time being even if the liquor tax increases next month.

On the 27th, when the expected inflation rate indicating consumers' price outlook fell to the 3% range for the first time in six months, citizens visited the Seoul Hanaro Mart Yangjae branch to do their shopping. Photo by Jinhyung Kang aymsdream@