Public Service Charges to Be Curbed
By Lee Hyo-sik
Staff Reporter
A senior finance ministry official said Tuesday that the government will discourage utility firms and other public service providers from raising charges to curb high inflation.
The ministry also plans to ask businesses to lower retail prices of their products by reflecting recent drops in import costs, while strengthening the monitoring of price movements of daily necessities to help ease the financial burden on low-income earners.
Vice Strategy and Finance Minister Kim Dong-soo said the government will require public companies to take a range of restructuring measures aimed at improving management efficiency and cutting costs so that they do not have to increase public service charges.
``We will make every effort to curb increases in various public service fees. At the same time, we will take the necessary steps to lower the costs of goods and services to financially help families here grappling with slower income growth and rising debt amid deteriorating economic conditions,'' Kim said.
He said the government will encourage manufacturers of basic necessities to slash retail prices by reflecting the falling value of oil and other imported raw materials, stressing price monitoring will be beefed up to crack down on any illicit practices aimed at keeping consumer prices high.
``We will strengthen the monitoring of 52 basic goods and services frequently consumed by low-income earners. We will take stern measures against those who commit price collusion and other illegal activities,'' the vice minister stressed.
His remarks came after a recent report that Korea is the only nation grappling with high inflation despite falling international raw material prices among Organization for Economic Cooperation and Development (OECD) members.
The cost of eating-out here rose by a 10-year high of 4.7 percent last year, with prices of ``ramyon'' and ``jajangmyon'' (Chinese black-bean noodles) going up 15 percent and 13 percent, respectively. Prices of gasoline and other oil products surged 19 percent.
In recent months, consumer price growth has slowed but families have not benefited from falling international raw material costs as much as their counterparts in other countries because of the weak Korean currency and domestic firms' reluctance to cut prices.
According to the statistical office, consumer prices expanded at a slower pace of 4.1 percent in December. The growth slowed for the fifth consecutive month since July, when monthly inflation hit a year high of 5.9 percent.
But other nations have seen a much steeper price decline, meaning that consumers overseas have benefited more from plunging international commodity prices than consumers here.
Inflation growth in the OECD member economies averaged 2.3 percent in November, down sharply from last year's monthly high of 4.9 percent recorded in July.
The United States saw price increases plunge to 1.1 percent in November from 5.6 percent in July, while prices in China grew 2.4 percent, down from 6.3 percent over the same period.