The Korea Herald


Inflation expected to soon slow to 2% level: Choo

By Yonhap

Published : June 18, 2023 - 10:24

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Finance Minister Choo Kyung-ho speaks during a meeting in Seoul on Friday. (Yonhap) Finance Minister Choo Kyung-ho speaks during a meeting in Seoul on Friday. (Yonhap)

South Korea's consumer prices are expected to grow at a 2 percent level around June or July, the finance minister said Sunday, amid signs of eased inflationary pressures.

"In general, consumer prices are gradually finding stability," Finance Minister Choo Kyung-ho said during a program aired by KBS. "I think the inflation will hit the 2 percent level this month or the following one."

Consumer prices, a key gauge of inflation, rose 3.3 percent in May from a year earlier, compared with a 3.7 percent on-year advance in April, according to a recent report from Statistics Korea.

The growth fell below 4 percent for the first time in 14 months in April. The latest figure also marked the lowest level since the 3.2 percent growth tallied in October 2021.

South Korea's inflation has been on a downward trend with some ups and downs after reaching a peak of 6.3 percent in July last year.

"We are approaching the end of the tunnel of economic hardships," he added.

Touching on the country's utility fees, Choo noted that although the global price of energy resources has stabilized, it will take "years" for state-run companies to overcome their deficits.

The prices of utility services shot up 23.2 percent on-year in May amid the prolonged jitters in the global energy supply over the Russia-Ukraine war, which induced the state-run Korea Electric Power Corp. to raise rates. South Korea depends heavily on imports for its energy needs.

Choo also expressed hopes that local food manufacturers would adjust the price tags on their products, including instant noodles, to reflect the latest decline in the global cost of flour.

Concerning the looming diplomatic tension with Beijing, Choo said China is nevertheless the top trading partner of South Korea, pointing out that such cooperation should continue.

"(South Korea and China) must maintain their economic relationship based on mutual respect and benefits," Choo added.

The finance minister, meanwhile, reiterated the government is not considering an extra budget, despite the calls from the main opposition Democratic Party. (Yonhap)