Vice ministers muster in battle against inflation

The government has moved with unprecedented speed to tame inflation, with President Park Geun-hye emphasizing price stability as the key task of the new government at her first senior secretary meeting.

The new government also disclosed plans to deploy the Fair Trade Commission and National Tax Service. The announcement came at an anti-inflation meeting Thursday attended by vice ministers and chaired by Shin Je-yoon, first vice minister of strategy and finance.

“Financial difficulties of households have intensified due in part to higher prices for processed food and utility bills at the beginning of the year, and concerns are rising about manufacturers piggybacking on the price hikes,” said Shin. “The government will crack down on inflation to set the tone of policy for the next five years.”

Park’s commitment to achieve price stability has been decisive in the government’s determination to deal with piggybacking and profiteering.

As the reorganization of the government fell through and the seating of the Cabinet was delayed, anxiety rose over the effectiveness of the new administration, with some saying the government is temporarily closed.

In response, the vice ministers decided to take the lead against inflation.

When looking at the recent upswing in living costs, their concern is understandable. Although the annual inflation rate stood at 1.5 percent in January according to government indicators, prices for flour, packaged kimchi, soy sauce and doenjang, or fermented soybean paste, have risen 7 to 8 percent this year. Electricity prices have jumped more than 4 percent.

Taxi fares in Daejeon, Daegu, Busan, Cheongju, Chungju and Ulsan have gone up by 15 percent to 19 percent, and express bus and intercity bus fares will increase by 4 percent to 5 percent starting Saturday.

The government also will target the fundamental factors underlying the current price instability by easing distribution procedures in order to reduce costs and promote greater efficiency.

For utility bills, it plans to slow further price increases as much as possible by making management more efficient.

Also, when the price of gasoline exceeds 2,000 won ($1.84) per liter, the government will supply gasoline at 1,800 won to thrifty gas stations.

By Kim Dong-ho [kjy@joongang.co.kr]