"Possibility of Inflation Returning to 3% Range in February-March... Government's All-Out Effort for Price Stability"

100 Billion Won Additional Investment in Apples and Pears Ahead of Seollal
Deputy Prime Minister and Minister of Agriculture Visit Farms and Distributors
Improving Supply Structure with APC Support

Although inflation, which had remained at around 3% throughout last year, fell to the 2% range in January this year, the government stated that inflation could rise back to around 3% in February and March depending on international oil price trends, and pledged to focus all efforts on stabilizing prices. Ahead of the Lunar New Year, the government, which had invested 59 billion won to stabilize apple and pear prices, decided to inject an additional 10 billion won, and Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Strategy and Finance, personally visited apple farms to check supply and price trends.

On the 2nd, Deputy Prime Minister Choi presided over an emergency economic ministers' meeting combined with a price-related ministers' meeting at the Government Seoul Office, stating, "Although the consumer price index in January recorded 2.8%, recent instability in the Middle East and the resurgence of international oil prices to the $80 range mean that inflation in February and March could rise again to around 3%."

Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is presiding over the Emergency Economic Ministers' Meeting and Price-Related Ministers' Meeting at the Government Seoul Office Building on the 2nd.
[Photo by Ministry of Economy and Finance]

On the same day, Statistics Korea announced that the consumer price index for January was 2.8%, marking the first time in six months since July last year (2.3%). The core inflation rate, which reflects underlying price trends, also fell to 2.5%. However, due to growing geopolitical tensions around the Red Sea region, with oil prices fluctuating between $70 and $80 per barrel, the government maintains a cautious stance and cannot afford to lower its guard.

The economic recovery still shows significant differences across sectors. Deputy Prime Minister Choi said, "While private consumption continues a gradual slowdown, the rapid decline in construction investment and the large differences across sectors mean that we have not yet reached a 'tangible recovery' that people can feel," and emphasized, "the government will make every effort to ensure that inflation stabilizes quickly and firmly in the 2% range."

In this regard, the government plans not only to keep the average prices of 16 Lunar New Year staple products lower than last year, but also to inject an additional 10 billion won into the agricultural and livestock discount support budget to stabilize prices of apples and pears, which remain higher than last year despite government measures. The government will raise the discount rate up to 40%, making it possible to purchase apples and pears at less than half price at some supermarkets during the remaining Lunar New Year period. Deputy Prime Minister Choi explained, "We will expand contract cultivation volumes of apples and pears by 8,000 tons to proactively prepare for future supply instability."

Choi Sang-mok, Deputy Prime Minister for Economy and Minister of Economy and Finance, visited an apple farm in Boeun, Chungbuk, on the 29th of last month, listening to the farmers' opinions and encouraging them.
[Photo by Ministry of Economy and Finance]

Song Miryeong, Minister of Agriculture, Food and Rural Affairs (center), visited Yangjae Hanaro Mart on January 31 to check the supply status of apples and pears, consumer prices, and discount support status.
[Photo by Ministry of Agriculture, Food and Rural Affairs]

Relevant ministers visited apple and pear production and distribution sites to directly check supply conditions. On the 23rd of last month, Deputy Prime Minister Choi visited the Garak-dong Agricultural and Marine Products Wholesale Market to observe apple and pear auctions and check supply conditions. On the 29th, he listened to the difficulties of apple producers at an apple farm in Boeun, Chungcheongbuk-do, and confirmed the apple shipment process at the Agricultural Product Distribution Center (APC). On the 30th, he visited customs at Incheon Airport to inspect the clearance status of quota tariff volumes for imported fruits such as mangoes and bananas. Minister Song Mi-ryeong of the Ministry of Agriculture, Food and Rural Affairs also visited the Chungju Agricultural Product Distribution Center on the 23rd and the Yangjae Hanaro Mart on the 31st to monitor consumer prices and discount support at the final consumption stage.

During this process, Deputy Prime Minister Choi received and focused on resolving the difficulties faced by farmers. When a farmer at the Boeun apple farm complained, "Anthracnose pesticide is expensive and burdensome," Deputy Prime Minister Choi instructed the government to consider support measures for anthracnose control costs. Another farmer expressed concern that "the forklifts used on farms are classified as industrial machinery rather than agricultural machinery, so they do not receive tax reduction benefits for acquisition and registration taxes." Deputy Prime Minister Choi responded, "We will look into reclassifying them as agricultural machinery." Relevant ministries plan to finalize detailed matters such as reclassification criteria for small agricultural forklifts by next month.

The government will also improve the supply structure of apples and pears in the medium to long term. This year, it will support facility improvement costs for two apple APCs (in Yeojeon and Geochang), and next year, it plans to expand support to increase the annual processing capacity of apple hub APCs from 78,000 tons to over 100,000 tons. It will also expand direct online transactions between production areas and buyers and reduce distribution costs, aiming to revitalize the online wholesale market to a level comparable to the Garak Market by 2027.