South KoreaThe government on Friday unveiled measures costing 810 billion won (nearly $625 million) to ease people’s cost of living – after President Yoon Suk-yeol called economic conditions ” emergency” and ordered officials to take all possible measures to ease the burden on people.
“It’s an emergency now,” a media pool report quoted him as saying at the first weekly emergency meeting of economy-related officials.
The measures, which include the removal of tariffs on certain food imports and an increase in social assistance for low-income people, were announced soon after.
Yoon’s comment came as inflation last month hit its highest level since the Asian financial crisis of the late 1990s, bolstering bets that the central bank would proceed with an unprecedented 50 basis point hike. basis of policy rate at a meeting to be held next week.
Economists said the measures were aimed at addressing the effects rather than the causes of inflation and would have little impact on the price trend going forward.
“There would be very limited, if any, effect on the price movement as these are targeted steps on the cost of living and for specific groups of people,” said Park Sang-hyun, an economist at HI Investment & Securities, which also expects a 50 basis point rate hike next week.
The finance ministry said tariffs would be lifted on beef and chicken imports while quotas on pork imports – on which tariffs have already been lifted – would be increased. These measures are expected to cost 330 billion won over the rest of the year.
Another 480 billion won of measures announced on Friday include an increase in social and job-related assistance for low-income people and other aid programs, bringing the total to 810 billion won.
While the inflation comes mainly from outside the country, which is heavily dependent on imports of energy, food and industrial products, it comes as President Yoon, who took office two months ago, struggles with a decline in popularity.
A weekly opinion poll conducted by Gallup Korea showed on Friday that President Yoon’s approval rating fell to 37% from 43% last week, from a disapproval rating of 49% – the first reversal since taking office.
- Reuters with additional editing by Jim Pollard