The South Korean government plans to raise its inflation forecast at 4 percent in its announcement in 11 years. This is double the figure that the government presented at the end of last year. The economic growth rate of this year is scheduled to be lowered from the existing 3.1% to somewhere between 2.5 % to 2.9%. Based on the conclusion that the surge in consumer price index is serious, the government plans to supply 8 billion won worth of discount coupons on agricultural, livestock and marine products and will review emergency discount promotions over egg, radish and cabbage.
As of Sunday, the Ministry of Economy and Finance informed that the new Korean government shall announce this year’s economic policy directions within this month. The economic policy direction will harbor the blueprint of the five-year economic policy from the Korean government of President Yoon Suk-yeol. The government’s inflation and economic growth outlooks will be significantly adjusted. The inflation rate forecast is expected to be revised from the December 2021 announced 2.2% to 4% level. The real GDP (gross domestic product) growth outlook is scheduled to be lowered from the existing 3.1% to somewhere above 2.5% and below 3%.
Behind the government’s revision of its economic outlook lies deteriorating overseas and local conditions including soaring international oil price and raw material prices, won-dollar exchange rate increase, and interest rate hike etc. The correction also aims to prepare precise crisis measures through an accurate diagnosis of the economy as President Yoon mentioned the “economic crisis” as of Friday.
The government will distribute 8 billion won worth discount coupons for agricultural, livestock and marine products within this month to curb inflation. The discount coupons will first apply to products such as pork and egg of which prices rose. “Daily consumer prices face uncertainties from the quick spread of surge in international grain crops prices from the crisis in Ukraine and major grain crop producing countries’ export restrictions to the local markets,” said Deputy Prime Minister and Economy and Finance Minister Choo Kyung-ho, who visited Nonghyup Hanaro Mart in Seoul, Dobong-gu. “The government shall seek measures to stabilize consumer prices and public welfare by stable supply of agricultural produces, secure the basis for self-sufficiency of food, production, distribution cost saving etc.”