mrsquirrel
Joined: 13 Dec 2006
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 Posted: Wed Mar 19, 2008 10:17 pm Post subject: SKorean government announces emergency steps to curb inflati |
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SKorean government announces emergency steps to curb inflation
SEOUL (Thomson Financial) - The South Korean government announced Thursday an emergency decision to lift import tariffs on 70 price-sensitive products, including wheat and corn, to help tame rising inflation.
The decision was made at a meeting of economic ministers chaired by President Lee Myung-Bak, the presidential office said.
The ministers also decided to freeze public utility charges, including charges for public transportation and tap water. The presidential office said the details will be finalized at a cabinet meeting next week.
The government will boost the distribution of aluminum, copper, nickel and other nonferrous metals to cope with soaring raw materials prices.
Lee and the ministers agreed to identify 50 major products, such as pork, eggs and milk, for intensive price oversight, said spokesman Lee Dong-Kwan.
The president called for quick and effective steps to stabilize consumer prices, the spokesman said.
'We must work out concrete steps for the stable livelihood of low-income people,' the president was quoted as saying.
Lee also instructed his administration to address the swelling tourism deficit, which hit an all-time high of 10.1 billion US dollars last year.
Inflation reached an annual rate of 3.6 percent in February, overshooting the central bank's target for the third month in a row.
South Korea, the world's 13th largest economy, has few natural resources and has been especially hard hit by rising global commodity prices.
It is also grappling with a recent fall in the value of the won against the dollar, which makes imports more expensive and pushes up inflation.
Lee is aiming for 6 percent growth this year, compared to around 5 percent in 2007. But officials fear high inflation will discourage private consumption and impede economic growth.
The government has announced a series of steps to revitalize the economy, such as a 3 percent cut in corporate taxes and an expansion of tax favors to companies.
But with global demand for South Korea's manufactures set to ease, Moody's Economy.com forecasts a growth rate of around 4 percent this year.
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