Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Taming inflation tops election pledges of rival parties
Shoppers buy fruit and other farm produce at a supermarket in Seoul, March 26. Yonhap
By Yi Whan-woo
Taming soaring inflation has taken center stage in the campaign pledges of rival parties leading up to the April general elections as high prices, particularly those of agricultural products, have emerged as a major concern for the public.
The emphasis on controlling consumer prices comes as polls show persistently high inflation topping the list of sensitive issues that can influence the elections.
Inflation rose to 3.1 percent in February, up from 2.5 percent in January, briefly dipping below 3 percent for the first time since July 2023, when it stood at 2.4 percent. Although the March figure is not yet available, estimates from eight securities firms suggest inflation likely remained above 3 percent.
According to a recent poll by Research & Research from Thursday to Friday, 69.8 percent of 1,004 adults who were surveyed said the government's countermeasures against inflation are flawed.
Such polls also show voters generally disapprove of the Yoon Suk Yeol administration’s measures to curb inflation, especially in light of the soaring prices of fruit and other farm produce that are making it difficult for the government to bring down inflation to the targeted 2 percent by the first half of 2024.
In the same survey, 61.5 percent of the respondents said they were disappointed by Yoon's performance, while 35.1 percent cited his economic policy as the biggest failure.
The survey was conducted upon the request of the Dong-A Ilbo and had a margin of error of plus or minus 3.1 percentage points. Further details are available on the National Election Survey Deliberation Commission’s website.
“The findings suggest that convincing voters about the commitment to combat inflation will be crucial in winning the election,” Myongji University political science professor Shin Yul said.
“Under the circumstances, swing voters are anticipated to wait until the last minute before choosing a candidate for their respective constituency.”
Concerning the issue, ruling People’s Power Party (PPP) interim leader Han Dong-hoon promised to temporarily halve value-added taxes for daily necessities and sought-after food items to 5 percent from 10 percent.
The targeted goods range from baby care products to ramyun, canned food, flour and sugar.
“And I’ve strongly asked the government to comply with the party’s pledge as it is closely related to the people’s livelihood,” Han said last week.
In a joint discussion earlier in March, the government and the PPP agreed to inject 150 billion won ($111.2 million) to stabilize the prices of domestic farm produce.
Plus, they agreed to lower tariffs on imported farm produce to ensure a sufficient supply of the targeted goods.
The government has encouraged manufacturers and distributors to join the campaign against inflation, which led CJ CheilJedang to lower the prices of its flour and flour-based products by 6.6 percent on average starting Monday and Ottogi to lower the price of its cooking oil by 5 percent.
The main opposition Democratic Party of Korea's (DPK) countermeasures against inflation are primarily focused on distributing cash-like coupons to households.
“The economic situation is as serious as it was in the COVID-19 pandemic era,” DPK Chairman Lee Jae-myung said last week.
He suggested offering 250,000 won in cash-like coupons to every Korean national, which would be restricted for use solely within their respective neighborhoods.
Such forms of financial support will not boost inflationary pressure, according to the DPK.
Lee also proposed compensation for financial losses incurred by farm owners due to the increase in imports of farm produce.