Inflation growth may exceed 5% in May: gov't official

First Vice Finance Minister Bang Ki-sun / Yonhap

The government plans to announce a set of measures to tame inflationary pressure and stabilize people's livelihoods next week amid the prospect that the growth of consumer prices could top 5 percent, a senior official said Thursday.

The country faces an urgent need to stabilize prices of food and other items closely linked to people's lives, according to First Vice Finance Minister Bang Ki-sun.

"Some experts forecast consumer inflation could exceed 5 percent in May, accelerating from the growth rate in April," Bang said at a government vice-ministerial meeting on the economy.

Consumer prices spiked 4.8 percent year-on-year in April, the fastest increase in more than 13 years, due to soaring energy costs and a rebound in demand from the pandemic. The April figure followed a 4.1 percent rise in March.

If inflation growth tops 5 percent in May, it would be the first time since September 2008 that consumer prices climbed to that range.

The International Monetary Fund forecast Korea's 2022 inflation would grow 4 percent, doubling from the central bank's 2 percent target. The Korea Development Institute, a state-run think tank, put its forecast at 4.2 percent.

In an effort to help stabilize people's livelihoods, the government is considering extending a cut in consumption tax on passenger cars for another six months.

A 30 percent cut in the consumption tax on the purchase of passenger cars is supposed to expire at the end of June. The tax rate stands at 3.5 percent. The government has repeatedly extended the measures by six months since the second half of 2020. (Yonhap)