49th Meeting of Central Economic Response Headquarters
Government to Keep Prices in Check
Deputy Prime Minister Hong Nam-ki presided over the 49th Meeting of the Central Economic Response Headquarters held on December 2, and discussed the current economic situation, along with plans to better manage inflation and boost pandemic support amid rising concerns over the new Omicron variant. Measures to protect Korean citizens from financial frauds, in particular voice phishing, were another topic of discussion, plus plans to strengthen the service sector and better support young adults in times of digital transformation.
The following is a summary of DPM Hong’s keynote address.
Current economic situation
Although we expect a strong economic rebound in the fourth quarter, there are also growing concerns over uncertainties arising from inflationary pressures and the new Omicron variant. The rebound signs are coming from strong exports and consumption in November when exports hit an over 30 percent increase, getting a monthly shipment of over US $60 billion for the first time in record, and credit card spending as of the 28th of the same month grew more than 12 percent. These features have been reflected in the latest OECD economic outlook which maintains the country’s 2021 growth at 4.0 percent and revises up next year’s to 3.0 percent.
However, given the economy’s closeness to the global economy as is shown in the October industrial activities data[1], the new Covid variant and rising inflationary pressures will likely add uncertainties to burgeoning rebound. Thus, the government will step up its efforts to help with recovery, such as by improving the disease prevention measures, successfully spending budgets allocated to boost consumption and investment, and above all extending the support for passenger airliners and duty free shops.
Keep prices in check
Despite consumer prices for November getting on a steeper trajectory, the government projects an eased curb in December with lower international oil prices, the effect of oil tax cuts and a slowdown in seasonal demand for winter vegetables[2]. The government will do the following to keep prices in check.
- Encourage gas stations to fast reflect the oil tax cut in their prices, and increase state-backed ‘thrifty gas’ stations, where citizens can access government supplies at a lower cost
- Increase discount coupons for farm product purchases
- Expand tariff quotas for high priced goods
- Extend the current high rate of income tax deduction for farm product purchases to the end of 2013
Protect citizens from voice phishing and other financial frauds
The voice phishing figures amounting to over 700 billion won, the government will do the following to help avoid financial frauds.
- Work on the introduction of new text message services which can tell whether or not the message is voice phishing, and strengthen call screening services
- Promote the development of screening technologies against fraud calls and apps
- Improve the crime reporting system for faster response
- Work to rid illegal financial services, such as by revising the private lender act
- Promote the reporting of illegal pyramid schemes
Strengthen the service sector
The government, according to the outcomes of its 2nd taskforce for services development, will promote R&D, standardization and statistics production of services.
- Spend 1.76 trillion won on services R&D in 2022
- Build a system to better protect intellectual property
- Draw up roadmaps for the standardization of 100 promising services
- Help develop the workforce needed by new services, such as those based on meta-verse
Better support young talents in the era of digital transformation
The government has drawn up expansive policies to better support young adults in the era of digital transformation, when demand is surging for young workers equipped with high tech skills and knowledge. The support will be announced later after in-depth discussion.
Please refer to the attached pdf
