Ando Geol "Government Measures Needed for Small Business Owners and Self-Employed Amid Economic Recession"

Short-term Consumer Prices Expected to Continue Rising in the 3% Range

Ando-geol, Chairman of the Economic Research Institute (former Vice Minister of Strategy and Finance), predicted that consumer prices will continue to rise in the 3% range in the short term.

He emphasized that if the economy becomes difficult due to rising prices and the livelihood of the common people suffers significant damage, government measures for small business owners and self-employed individuals will be necessary.

He also stated that the national treasury subsidy budget for regional gift certificate discounts, which was completely cut from next year’s government budget, should be restored to an appropriate level during the National Assembly’s budget review process, urging local lawmakers to take interest and make efforts.

Analyzing the August consumer price statistics, Chairman Ando diagnosed that consumer prices, which had fallen to the 2% range in June and July, turned upward again to 3.4% in August, increasing the difficulties of the common people’s livelihoods.

He explained that 80% of the August consumer price increase was due to the rise in international crude oil prices, which reflects how vulnerable South Korea’s economic structure is to international crude oil prices. He analyzed that the remaining price increase factors were due to agricultural product prices caused by heatwaves and heavy rains.

Regarding future price outlooks, he forecasted that the consumer price increase in the 3% range will continue until September, which includes the Chuseok holiday, mainly driven by prices of agricultural, livestock, and fishery products.

He mentioned that the future price situation depends on international oil prices, noting that there are conflicting forecasts: some expect prices to surpass $100 per barrel due to production cuts by Russia and Saudi Arabia, while others believe that international oil prices will not remain high due to sluggish economic recovery in China and the resulting decrease in oil demand.

Therefore, he emphasized that the government should strengthen monitoring of the international crude oil market and prepare preemptive measures in case of emergencies.

Chairman Ando said, “The economic outlook for the second half of this year is getting darker as China’s domestic demand recovery is delayed due to real estate insolvency and stagnation, causing our exports to recover slowly. Reflecting this, this year’s economic growth rate is likely to fall below the current government forecast of 1.4%.”

Meanwhile, the Ando-geol Economic Research Institute is recognized as a think tank for the development of Gwangju and plans to continue lectures, research, discussions, and agenda setting for Gwangju’s development through its ‘Visiting Policy Meetings.’