Finance Minister nominee Choo Kyung-ho heading to the office of the presidential transition committee in Seoul on April 14. (Yonhap)
South Korea’s finance minister nominee on Monday dismissed concerns that the country’s economy is falling into stagflation, a mix of high prices and slumping growth, but said he expected high inflationary pressure will continue for the time being.
Rep. Choo Kyung-ho, named to concurrently serve as deputy prime minister for economic affairs, made the remarks in a written reply to a lawmaker’s question on economic situations as he prepares for a parliamentary confirmation hearing set for May 2.
“The South Korean economy is not in a phase of stagflation, but (I am) gravely looking at the situation,” Choo said.
He said economic growth and the recovery of private spending has slowed down amid surging energy costs caused by Russia’s war with Ukraine.
“In light of price situations and the Ukraine crisis, there is a possibility that inflation will be under upward pressure for the time being,” Choo added.
Asia’s fourth-largest economy is widely expected to grow at the 2-percent range this year after the 4-percent expansion last year. Consumer inflation is likely to shoot up near 4 percent this year, far above the central bank’s 2 percent inflation target.
Last week, the International Monetary Fund (IMF) lowered its 2022 growth outlook for the South Korean economy to 2.5 percent from its earlier estimate of 3 percent. The IMF hiked the inflation projection for Korea to 4 percent from 3.1 percent.
South Korea’s consumer prices grew 4.1 percent in March from a year ago, the fastest on-year gain in more than 10 year, as crude oil and other commodity prices sharply rose due to the war in Ukraine. (Yonhap)