South Korea: Gov't, ruling party agree to strive to curb inflation

Seoul, July 6 (IANS) The government and the ruling party agreed Sunday to make an all-out effort to stabilise prices and to swiftly implement the supplementary budget in an effort to better support the livelihoods of the people and spur economic growth, officials said.

The agreement was made during a high-level policy coordination meeting between the ruling Democratic Party (DP) and the government held at the prime minister's residence in Seoul.

The meeting marked the first of its kind since Prime Minister Kim Min-seok took office Thursday following his parliamentary confirmation hearing.

"There was a shared understanding that every effort should be made to stabilize perceived inflation, as the high price levels continue to weigh on the people's livelihoods," party spokesperson, Park Sang-hyuk, told a press briefing.

"The ruling party urged the government to maintain close communication with industry stakeholders to minimize price increases in processed foods and ease the burden on consumers. In response, the government agreed to actively consider the matter," he added.

According to government data, consumer prices, a key gauge of inflation, increased 2.2 per cent from a year earlier in June, marking the steepest on-year increase since January.

Prices of processed food products, in particular, rose 4.6 per cent on-year, the highest increase since November 2023, which contributed 0.39 percentage point to overall inflation last month.

During the meeting, the DP requested the government to execute the second supplementary budget as quickly as possible "to avoid missing the golden window for economic recovery," and the government said it plans to execute 85 per cent of the budget by end-September, according to the lawmaker.

The Cabinet on Saturday approved an extra budget bill of 31.8 trillion won (US$23.3 billion), marking the first supplementary budget under the Lee Jae Myung government.

During the meeting, the government also reported that it would take measures to thoroughly prepare for natural disasters, such as floods and storms, and the two sides agreed to enhance responses to heat waves, Park noted.

In his opening remarks, Kim said that the meeting serves as the key venue for coordinating the national agenda.

"We plan to discuss ways to maximise the impact of the supplementary budget, public relief measures and thorough preparedness for summer disasters like heat waves," the prime minister added.

Attendees from the ruling party included floor leader Kim Byung-kee, who is also serving as the party's acting leader, and Rep. Jin Sung-joon, the party's policy committee chair.

They were joined by the Prime Minister, Yoon Chang-ryeol, chief of the Office for Government Policy Coordination, and First Vice Minister of Economy and Finance Lee Hyung-il.

DP floor leader Kim urged the government to act quickly on multiple fronts, citing the need to implement the supplementary budget, ease the burden of high inflation and prepare for heat waves.

--IANS

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