The Government's Anti-Inflation Policies: Are They Enough to Combat Rising Prices?
Key Highlights :
The recent surge in prices of everyday goods, such as vegetables, meat and milk, has caused a great deal of concern for consumers and the government alike. In response, the government has taken a full-pledged approach to temper inflation, appointing vice ministers from all ministries to monitor the prices of goods related to supply and demand. First Vice Finance Minister Kim Byung-hwan has presided over an inflation-related meeting of vice ministers, and each ministry has launched a response team to conduct on-site surveys of price-sensitive goods. However, some experts remain skeptical of the government's anti-inflation policies, likening them to those of the Lee Myung-bak era.
Inflation is on the rise again after falling to a 25 month-low of 2.3 percent in July. Consumer prices have been increasing for three consecutive months, with a 5 percent year-on-year price increase for the first 10 months of this year. This trend is expected to continue until the end of the year and beyond, which would make it the first time in more than a decade that prices of staples have remained above 5 percent for three years straight.
In response to the rising prices, the Ministry of Economy and Finance announced that vice ministers from all ministries will be tasked with monitoring the prices of goods related to supply and demand. The Ministry of Trade, Industry and Energy has also formed a pan-government task force to keep track of weekly gas prices and crack down on any possible illegal business activities in the distribution channels.
The government's efforts to combat inflation have been met with skepticism from some experts. Hanyang University economics professor Ha Joon-kyung has argued that producers may wait until the government loosens its counter-inflationary policy and hikes prices again. Yang Jun-sok, a professor of economics at the Catholic University of Korea, has drawn a contrast between the length of inflation under the two governments, arguing that government intervention to curb prices may not be effective.
It is clear that the government is taking a proactive approach to combat inflation, but it remains to be seen whether these policies will be effective in the long run. The government must continue to monitor prices closely and take swift action to ensure that prices remain stable and people's livelihoods are not adversely affected.
