Lee Hyung-il: 'Inflation Is Our Top Mission… Will Try to Announce Additional Chuseok Price Measures'

Lee Hyung-il, nominee for Deputy Prime Minister and Minister of Economy and Finance, stated today (the 2nd), "We will work to find ways to increase the supply of holiday items or provide additional discounts, and announce extra price stabilization measures for the Chuseok holiday."

Nominee Lee, currently the First Vice Minister of Economy and Finance, held a press briefing at the Government Complex-Sejong today and said, "Although we have announced the Chuseok livelihood stabilization measures for September, I believe there are areas we need to reconsider," adding, "We will look for additional actions we can take."

This statement hints at the preparation of supplementary measures, following the government's announcement yesterday (the 1st) to supply a record-high 180,000 tons of holiday items and support 100 billion won in discounts on agricultural, livestock, and fishery products to stabilize Chuseok grocery prices.

Lee noted, "Price stability is the foundation of the livelihood economy and the starting point for resolving polarization," adding, "High inflation hits vulnerable groups the harshest."

He emphasized, "With the mindset that everyday grocery prices are the economic team's report card, we will do our utmost to stabilize prices," and stressed, "Inflation is the highest mission of the price authorities."

Regarding the outlook that it may be difficult to achieve price stability targets as the government maintains an expansionary fiscal stance, he diagnosed, "August inflation (3.1%) was driven by a specific company's telecommunication fee reduction effect from last year, and without that, it would have been in the mid-2% range," adding, "Fundamentally, inflation is on a downward trend from 2.8% in July."

Lee went on to forecast, "We need to keep an eye on developments in the Middle East war, and how oil prices react will be a crucial variable for inflation, but as that situation resolves, the upward pressure on prices should fundamentally weaken."

He stated, "In fiscal policy, I believe it is necessary to expand growth capacity through an expansionary stance and make targeted investments to resolve polarization," adding, "The monetary authorities are taking measures regarding aggregate demand in that process."

He added, "Fiscal policy will take the form of selectively targeting and supporting necessary areas, while monetary policy can proactively respond and manage aggregate demand pressures."

Amid rising international oil prices due to geopolitical risks in the Middle East, he remained cautious on whether to extend the ceiling on petroleum prices, saying, "I have no choice but to say it is linked to international oil prices," and "It is an issue that needs to be considered while watching how the situation in the Middle East unfolds."

Regarding massive excess tax revenues collected due to this year's semiconductor boom, Lee said, "They will substantially exceed the budget finalized through the supplementary budget."

On the use of excess tax revenue, he explained, "I think it needs to be used to expand future growth engines and ease difficulties for the younger generation," and added, "This is also linked to the usage of the Future Response Fund."

He further noted, "Once the scale of excess tax revenue is finalized through the September tax revenue re-estimation, we will need to discuss specific uses while monitoring macroeconomic and financial market conditions at that time."

Despite the expansionary fiscal stance, Lee mentioned, "According to the budget plan announced yesterday, the national debt-to-GDP ratio is projected to reach 49% within the administration's term," adding, "It is 10 percentage points lower than originally expected, which in itself shows a significant improvement in fiscal soundness."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.