Ministry of Strategy and Finance of Republic o : 7th Ministerial Meeting to Address Current Economic Issues

7 Ministerial Meeting on Current Economic Issues

Deputy Prime Minister Yoo Il Ho presided over the 7 Ministerial Meeting to Address Current Economic Issues and the Ministerial Meeting on Consumer Prices[1], and discussed current consumer prices and ways to address issues regarding trade with China.

Current Consumer Prices

Consumer price inflation has been stable in the one percent range although rising oil prices have pushed up prices somewhat. However, due to high prices of vegetables, eggs and other necessities, which surged recently, many Koreans are feeling that prices are comparatively higher than the actual inflation rate. Although agricultural product prices are projected to stabilize from April onwards, the prices of petroleum products and processed food are expected to increase in line with rising international commodities prices.

Against this backdrop, the government has worked on stabilizing prices closely related to cost of living, such as the prices of agricultural products and processed food as well as local governments' public service charges. With the Lunar New Year holidays approaching, the government will work on stabilizing the supply of Lunar New Year holiday items by successfully implementing its consumer price stabilization measures, announced on January 10.

With regard to processed food prices, the government will work with citizen activist groups to monitor if there are any unreasonable price increases, and firmly deal with any illegal practices, such as price fixing. The government will also work to make public service charge increases be as little as possible.

To maintain price stability in the mid- to long-term, the government will focus on agricultural and livestock product prices, petroleum product prices and communications service charges. The government will help stabilize the supply of agricultural products by increasing the amount provided by government contractors[2], and by streamlining the distribution system in the case of livestock products. As for the petroleum product and communications service markets, the government will promote competition, such as by improving the management efficiency in low price gas stations and improving the quality of low price mobile phone plans.

The government will firmly deal with any illegal practices, such as hoarding and price fixing.

Ways to Address Issues regarding Trade with China

The government will review Korea-China economic cooperation relations as well as current issues regarding trade with China. We will work to find solutions to the current issues, and to improve relations and communications with China. To this end, the government will

- Expand the current Korea-China trade task force into a joint public-private regular meeting where ways to improve business-specific cooperation, such as batteries, will be discussed

- Take issues with China if necessary through various bilateral channels and multilateral channels

- Use the 25 anniversary of Korea-China diplomatic relations as an opportunity to improve economic cooperation, strengthen cooperation between the private sectors, and increase cultural and human resources exchange

- Work for strengthening industrial competitiveness and expanding

Please refer to the attached pdf

[1]The two meetings were held together.

[2]Government contractors are obliged to watch the supply-demand situation and adjust their production accordingly, and are given government's price guarantee for 80 percent of the amount contracted (80% of the annual average over the past 5 years excluding the highest and lowest figures of the year)