Vice Minister of Economy and Finance Ki Jae: "Inflation Slowdown in the Early to Mid 2% Range Expected to Resume This Month"

Government, Vice Ministers' Meeting on Price-related Issues

Kim Beom-seok, Vice Minister of Strategy and Finance, is delivering opening remarks at the "28th Vice Ministerial Meeting on Prices" held on the morning of the 2nd at the Government Seoul Office in Jongno-gu, Seoul.

Kim Beom-seok, First Vice Minister of the Ministry of Economy and Finance, stated, "If temporary factors such as adverse weather conditions are resolved and no additional shocks occur, the inflation slowdown trend in the mid-2% range is expected to resume from August."

At the '28th Vice Ministers' Meeting on Inflation' held at the Government Seoul Office on the 2nd, Vice Minister Kim said, "Although the consumer price index rose by 2.6% in July due to heavy rain and international oil prices, it has maintained the 2% range for four consecutive months, and core inflation also rose by 2.2%, indicating a continued trend of price stability."

However, he added, "Given the high uncertainty due to the renewed instability in the Middle East and abnormal weather, we will remain vigilant and do our best to stabilize the inflation trend."

According to the 'July Consumer Price Trends' released by Statistics Korea on the same day, the consumer price index last month rose by 2.6% compared to a year ago. After a declining trend following April (2.9%), May (2.7%), and June (2.4%), it somewhat rebounded in July. Agricultural, livestock, and fishery products rose by 5.5%, and industrial products including petroleum products increased by 2.6%, leading the overall rise. Petroleum products rose by 8.4%, marking the highest increase in 21 months since October 2022 (10.3%).

Vice Minister Kim said, "We are closely monitoring international oil price trends related to the Middle East situation and will respond promptly according to contingency plans if necessary. We will also continue efforts to structurally stabilize petroleum prices, including selecting 40 budget gas stations within the year."

There are also plans to thoroughly manage the supply and demand of agricultural products to stabilize food prices. Vice Minister Kim stated, "We have completed more than 98% of the recovery from crop flooding damage caused by heavy rain, and disaster insurance for crops is being paid in advance up to 50% of the estimated insurance amount. To stabilize the supply of cabbage and radish, whose prices have recently risen, we are releasing more than 300 tons of stock daily and have been supplying cabbage to large supermarkets at a 30% discounted price since yesterday."

Vice Minister Kim added, "Reflecting recent declines in international food raw material prices such as wheat and raw sugar, some industries have lowered product prices like sugar. The dairy industry has frozen raw milk prices and decided to reduce processed milk prices. The government will continue to support cost reduction and competitiveness enhancement in the food industry and communicate with the industry to ensure that cost reductions are reflected in prices."