Rising inflationary pressure on the back of temporary components

Rising inflationary pressure on the back of temporary components


Reflecting rising concerns about stronger
inflationary pressure,… felt especially by consumers,… Korea’s top economic policymaker
listed price stability as his key priority. Shin Se-min has more from the briefing with
lawmakers on policy guidelines for the year. Korea’s Finance Minister Yoo Il-ho said the
government will work to prevent inflationary pressure, seen in agro-livestock and petroleum
products, from spreading to other goods. While briefing the parliament’s Strategy and
Finance Committee Tuesday, Minister Yoo said his team will carefully monitor economic conditions
and roll out additional measures if needed. This,… in response to rising consumer prices
already seen in the first inflation report of the year released earlier this month. Consumer prices rose at the fastest pace in
over four years this January,… with on-year growth surpassing 2-percent for the first
time, after staying at the one- percent-level for the previous four months. Adding to concerns are the temporary factors
like the lasting effects of the bird flu outbreak from last year — one of the worst the country
has seen to date — and now the foot-and-mouth disease that is taking a toll on livestock
farms. Egg prices had shot up 62-percent early last
month on-year… due to supply shortages… although prices
have regained some stability over the weeks. It’s been a little over a week since the first
case of foot-and-mouth disease was confirmed, but already meat prices are on a rapid upward
trend. Korea Institute for Animal Products Quality
Evaluation says the price of first-class homegrown beef shot up 10-point-2 percent, while the
wholesale price for pork rose 9-point-9 percent last Wednesday — a sharp increase in just
over eight days. The threat comes from rising prices potentially
being coupled with sagging growth. “This trend of rising consumer prices could
lead directly to stagflation, especially when it comes to the price of fresh foods, due
to the outbreak in the livestock industry. The impact of this is instantly felt by consumers.” “Although such temporary factors will pass,…
the expert adds that such frequent price hikes of everyday groceries will freeze up consumer
sentiment even more, making it difficult to boost demand in times of already weak spending. Shin Se-min, Arirang News.”

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