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1st Emergency Ministerial Meeting on Economic Affairs

  • DivisionPolicy Coordination Bureau - General Policy Coordination Division
  • DateJune 19, 2022
  • Tel+82 44 215 4510

1st Emergency Ministerial Meeting on Economic Affairs

 

Government Draws up Measures to Stabilize Prices


 

 

Deputy Prime Minister Choo Kyung-ho presided over the first Emergency Ministerial Meeting on Economic Affairs[1] on June 19 to discuss trends in the prices of fuel, agricultural and livestock products and policy levers to stabilize prices.   


The following is a summary of DPM Choo’s opening remarks.

 

Rising uncertainty at home and abroad has recently weighed on people’s livelihood and multi-faceted crises such as inflation and economic slowdowns are expected to continuously linger over the economy.

 

In response, the Emergency Ministerial Meeting on Economic Affairs will replace the Ministerial Meeting on Economic Affairs to examine the economic situation and promptly devise measures to address economic challenges on a weekly basis.  

 

Globally, continued increases in the prices of fuel and raw materials have been exacerbating inflationary pressure and driving up consumer prices. The US and EU saw surges in consumer prices at 8.6% and 8.1% in May, respectively, which hovered above the market expectation. Korea’s consumer prices also recorded at 5.4% in May, continuously facing inflationary pressure.

 

To address the ongoing economic challenges, the government will focus on stabilizing prices and implementing policy actions, especially for managing the prices of three items: public utility charges, fuel, and agricultural and livestock products.

 

Public utility charges 

 

Public sectors will take the lead by example by reducing public utility charges.

 

- Keep cost-increasing factors under control as much as possible through the efficient management of public institutions and local governments

- Freeze public utility charges such as railroad fares, postage charges, and sewage services charges in the second half of 2022 and manage to keep them stable

- Work to minimize price hikes in electricity and gas amid rising global energy prices

 

Fuel prices

 

The government will take immediate actions to reduce the fuel burden on households.


- Expand the reduction in fuel tax by a legal maximum rate of 37 percent, effective from July to December, to lower the overall price of petroleum products

- Relax the criteria for fuel subsidies linked to diesel prices to 1,700 won from the current 1,750 won to reduce the burden on transport and logistics industries 

- Lower import tariffs on aviation fuel for domestic flights to zero percent from the current 3 percent by applying tariff quotas to mitigate inflationary pressure on domestic airfares

- Double the income tax deduction rate for credit card use for public transportation to 80 percent to encourage people to use public transport and help lower their cost of living

 

Agricultural and livestock products

  

The government will work to control the prices of agricultural and livestock products that can be easily exposed to price fluctuation risks during the summer

 

- Closely monitor prices on a daily basis, focusing on agricultural and livestock products and essential items and take prompt actions such as stockpiles release, emergency imports, and price reductions

- Seek additional measures such as applying tariff quotas to more items in consideration of the market situation to stabilize the supply and demand

 

Support vulnerable groups

   

The government will also help vulnerable groups as higher prices disproportionately affect them.   

 

- Provide about 2.27 million low-income households with a maximum of 1 million won (per a household with 4 members) in a 1 trillion-won project to help vulnerable groups starting from June 24

- Give vouchers to about 1.18 million low-income households who have difficulty in access to energy starting from July 1

 

 



[1] The meeting was joined by ministries from related ministries including Ministry of Science and ICT, Ministry of Agriculture, Food, and Rural Affairs, Ministry of Trade, Industry and Energy, Ministry of Land, Infrastructure, and Transport, and Ministry of Oceans and Fisheries, and Office for Government Policy Coordination.




Please refer to the attached pdf.


Ministry of Economy and Finance
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