[EDITORIALS]Keep the lid on inflationConsumer prices seem to be on a violent surge. It started with a hike in raw materials prices early this year. Now consumer prices are stirred up. Dubai crude oil, which accounts for more than 70 percent of the crude oil that Korea imports, hovers above $32 per barrel in price recently, the highest in 41 months.
From January to March, consumer prices went up by 3.3 percent from the same period last year. The figure already exceeded the cap that the government aimed to maintain on inflation of 3 percent this year. Ordinary people seem to be experiencing a worse economic situation. They say that they are afraid to go shopping for dinner.
The outlook looks even more bleak. A rise in bus, subway, and taxi fares has been put off until after today’s elections. Prices of basic necessities, such as flour, ramyeon, beverages, and agricultural produce, have been climbing. The hike in oil prices is likely to lead to a rise in prices of petroleum products, which will again contribute to a rise in personal expenses.
The administration, in consideration of the legislative elections, has ladled out pork-barrel policies and development plans. Real estate prices, which seemed to have eased a little thanks to a strong government crackdown on speculation, are showing signs of resurging. About 400 trillion won ($350 billion) is floating in the market, looking for places to invest, threatening price stability.
With a clouded outlook for an economic recovery and jumping consumer prices, we are concerned that Korea may fall into stagflation.
A rise in consumer prices brings special agony to the lower income classes. They are already suffering from decreased incomes, the economic slowdown and credit delinquencies. If consumer prices surge like this, the low income class will have nowhere to go.
Concerned about the economic slowdown, the government may well have difficulties trying to address a hike in consumer prices. But we insist that the government put priority on stabilizing consumer prices. High consumer prices lead to social conflicts. A decrease in people’s real incomes will hurt the economic recovery. The government’s foremost task is to stabilize people’s lives; the first step is controlling consumer prices.