Economic recovery 'uneven' as inflation dips but spending slows: Finance Minister

Economy

Published: 02 Feb. 2024, 11:21

Economic recovery 'uneven' as inflation dips but spending slows: Finance Minister

Finance Minister Choi Sang-mok speaks during an emergency meeting of economic ministers in Seoul on Friday. [YONHAP]

Finance Minister Choi Sang-mok on Friday acknowledged positive indicators in the Korean economy but emphasized uneven recovery across sectors, coupled with weak domestic demand.

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"We've seen a series of data indicating an economic recovery, such as rising manufacturing production and exports," Choi said during an emergency economic ministers meeting on Friday to assess the latest economic situation and discuss a response.

"But we've not yet felt such warmth as the situation is widely different and uneven among sectors," the finance minister said, pointing to slowing private spending and weak investment.

Choi said he pledged to address these challenges, focusing on curbing inflation and supporting public well-being.

Choi also warned of a potential inflation bounceback to over 3 percent in the coming months amid geopolitical uncertainties in the Middle East and elsewhere.

Dubai crude, Korea's benchmark, rose to $82.4 per barrel in January from the previous month's $77.3, according to government data.

"The government will strive for achieving a 2 percent inflation level at an early date by boosting supplies of major agricultural items and implementing discount programs," Choi said.

In January, consumer prices, a key gauge of inflation, rose 2.8 percent on-year, marking the first fall below 3 percent for the first time in six months.

An additional 10 billion won ($7.54 million) will be earmarked to ease prices of farm produce and other fresh food items ahead of the Lunar New Year holiday, he added.

The Finance Ministry has said that this year's consumer prices are projected to gain 2.6 percent, though prices are likely to ease at a slower pace than earlier expected.

BY SEO JI-EUN, YONHAP [seo.jieun1@joongang.co.kr]