By Lee Hyo-sik
Staff Reporter
The government plans to either freeze or minimize hikes in public utility and transportation charges to curb rising consumer prices in the wake of the soaring cost of crude oil and other commodities.
It will also clamp down on the hoarding of iron bars and other construction materials, as well as price collusion among suppliers of daily necessities.
In an economy-related ministers meeting Thursday, presided over by Strategy and Finance Minister Kang Man-soo, the government decided to encourage state-run utility providers and municipal governments to freeze a range of public service charges, including that for tap water, and train and bus fares to ease the growing financial burden on households.
It will also ask public utility companies to operate more efficiently and reduce costs, as well as provide financial help, if necessary, to provincial governments that are negatively affected by such measures.
``Surging oil and other commodity prices are hitting low-income families and self-employed businesses hard. The government will continue to introduce a range of anti-inflation measures in the coming months to help them make ends meet. At the moment, it is important to put a lid on a number of public utility and transportation charges in the second half,'' Kang said.
The Ministry of Knowledge Economy also plans to crack down on the hoarding of iron bars and other construction materials in cooperation with the National Tax Service. In recent months, some distributors of such building materials have kept supplies off the market on expectations that prices will increase further, hitting construction firms hard.
The ministry will also check whether refineries, wireless service providers, automakers, hospitals and private language institutes have colluded with one another in respective areas to hike prices of their products and services.
Kang said the government will take harsh action against those who are responsible for hoarding and price collusion, as well as overhaul the distribution channels of agricultural and livestock products to lower prices, benefiting both producers and consumers
``We will offer financial and other assistance to livestock farmers struggling to make ends meet amid rising feed costs and falling demand for poultry and beef in the wake of the nationwide avian influenza outbreak and the controversy surrounding the safety of U.S. beef,'' he said.
These steps are the latest in a series of anti-inflation measures that the government has unveiled over the past month in a bid to curb rises in consumer prices.
On Wednesday, it announced around 4.2 million people in the low-income bracket will see cell phone call rates cut, costing telecommunication service providers approximately 500 billion won.
Earlier, the government said it will return 10.5 trillion won ― with over 7 trillion won earmarked for those in the low-income bracket, including truck drivers ― in tax rebates and other subsidies over the year from July 1.
Despite government efforts, consumer prices have risen at a faster pace over the past few months. Consumer prices rose 4.9 percent in May from a year earlier, the highest since June 2001 when prices jumped 5 percent, according to the National Statistical Office (NSO).
The 4.9 percent year-on-year growth is well above the Bank of Korea's target range of 2.5 percent to 3.5 percent and the government's 3.3 percent.
The government projected consumer prices will increase by over 4 percent year-on-year for the foreseeable future and the number of newly created jobs this year will fall short of last year's 280,000. It also said the current account deficit will hover at around $7 to $8 billion this year.
The central bank said the nation's gross national income (GNI) contracted 1.2 percent quarter-on-quarter, the largest quarterly setback since the first quarter of 2003. Gross domestic product (GDP) expanded 0.8 percent from a quarter ago, the slowest growth since the fourth quarter of 2006.
The shortfall in the current account widened to $1.56 billion in April from the previous month's $1.12 billion as the nation paid more to import crude oil and other raw materials amid rising costs.
The number of people with jobs recorded 23.94 million in May, growing only by 181,000, from the previous year. The increase is the lowest figure since February 2005 when 80,000 jobs were created.