Gov't says low inflation comes more from the supply side than from demand; not in a deflation situation
- 5 years ago
The Finance Ministry and the Bank of Korea held an economic policy meeting this morning to discuss low inflation.
It's usually held behind closed doors,... but for the first time under the Moon administration... it was open to the press.
Kim Hyesung reports.
First Vice Minister of Economy and Finance Kim Yong-beom says weak inflation data in recent months hasn't led to concerns about deflation just yet.
At an economic policy meeting between the Ministry of Economy and Finance and the Bank of Korea on Tuesday morning, the vice minister said low consumer prices in the last eight months come more from the supply side rather than from demand, as global oil prices and agricultural goods prices drove down consumer prices by point-74 percentage points.
Korea's benchmark Dubai crude hit 73 U.S. dollars a barrel in August 2018 but fell to 59 dollars a barrel last month.
He added that excluding the on-year drop in global oil prices, consumer price increases for August would have been at around 1-point-five percent.
The finance ministry also said the weak inflation was partly due to an expansion of healthcare and welfare policies like free school meals and expected consumer prices to go up starting the end of this year.
Bank of Korea Senior Deputy Governor Yoon Myun-shik said low inflation and slower growth have been seen widely across major economies since the global financial crisis due to the rise in e-commerce and globalization, and that Korea is not an exception.
He added that inflation remained below one percent for ten consecutive months in 2015 in Korea mainly due to falling global oil prices and that it wasn't a deflation situation.
But he said the BOK will closely monitor the mid-to-long term consumer price trend and vowed to work closely with the finance ministry, holding economic policy meetings every month to exchange data and analyze the effect of low inflation on the local economy.
Kim Hyesung, Arirang News.
It's usually held behind closed doors,... but for the first time under the Moon administration... it was open to the press.
Kim Hyesung reports.
First Vice Minister of Economy and Finance Kim Yong-beom says weak inflation data in recent months hasn't led to concerns about deflation just yet.
At an economic policy meeting between the Ministry of Economy and Finance and the Bank of Korea on Tuesday morning, the vice minister said low consumer prices in the last eight months come more from the supply side rather than from demand, as global oil prices and agricultural goods prices drove down consumer prices by point-74 percentage points.
Korea's benchmark Dubai crude hit 73 U.S. dollars a barrel in August 2018 but fell to 59 dollars a barrel last month.
He added that excluding the on-year drop in global oil prices, consumer price increases for August would have been at around 1-point-five percent.
The finance ministry also said the weak inflation was partly due to an expansion of healthcare and welfare policies like free school meals and expected consumer prices to go up starting the end of this year.
Bank of Korea Senior Deputy Governor Yoon Myun-shik said low inflation and slower growth have been seen widely across major economies since the global financial crisis due to the rise in e-commerce and globalization, and that Korea is not an exception.
He added that inflation remained below one percent for ten consecutive months in 2015 in Korea mainly due to falling global oil prices and that it wasn't a deflation situation.
But he said the BOK will closely monitor the mid-to-long term consumer price trend and vowed to work closely with the finance ministry, holding economic policy meetings every month to exchange data and analyze the effect of low inflation on the local economy.
Kim Hyesung, Arirang News.