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South Korea releases $625m in ’emergency’ inflation funding

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South Korea releases $625m in ’emergency’ inflation funding

July 08, 2022

Removal of import duties on beef and chicken; pork quota increased

South Korean President Yoon Suk-yeol on Friday described the current economic conditions as an emergency and ordered his government to take all available measures to ease the burden on people’s livelihoods, Reuters reported.

“It is an emergency situation now. Please devise all available measures to counter the situation,” a media pool report quoted him as saying during the first weekly emergency meeting of economy-related officials.

Shortly after the meeting, the government unveiled measures valued at some 810 billion won ($624.84 million) to help ease people’s cost of living, including removing tariffs on some imports food and increased social assistance for low-income people.

The move came as the country’s inflation last month hit its highest level since the Asian financial crisis of the late 1990s, bolstering bets that the central bank would carry out an unprecedented 50 basis point hike. base rate at next week’s meeting.

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 a very limited effect, if any, on price movement as these are targeted steps on the cost of living and for specific groups of people,” said economist Park Sang-hyun. 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 by Gallup Korea showed President Yoon’s approval rating fell to 37% on Friday from 43% last week, from a disapproval rating of 49% – the first reversal since taking office. active.

Source: Reuters