Seoul to continue efforts to tackle consumer price hikes amid Middle East war

Containers are stacked at a port in Pyeongtaek, Gyeonggi Province, May 8. Yonhap

Korea's finance ministry said Wednesday the government will roll out efforts to stabilize consumer prices amid the prolonged Middle East war, building on its economic achievements made during the first year of the current administration.

First Vice Finance Minister Lee Hyoung-il announced the plan during a Cabinet meeting held in Seoul ahead of the upcoming first anniversary of President Lee Jae Myung taking office, according to the Ministry of Finance and Economy.

During the Cabinet meeting, the vice minister said Korea promptly overcame the aftermath of the botched martial law bid in late 2024, with the economy expanding 1.7 percent in the January-March period from a quarter earlier.

In a report, the finance ministry said the government stabilized living costs and pursued an industrial transformation led by artificial intelligence (AI) technologies, while working to revitalize the financial market.

Based on those efforts, the finance ministry said eight major global investment banks have projected Korea's economy to grow 2.6 percent in 2026, raising their previous estimate of 2.1 percent.

Korea's main stock market has become the world's eighth largest, up from 13th place in June 2025, the ministry said.

"Considering these strong fundamentals, major credit rating agencies have maintained the country's ratings at stable levels, indicating that other countries are giving positive assessments of the Korean economy," the ministry added.

The finance ministry said it will continue efforts to bolster economic growth under the principle of "pragmatism and performance," and ensure that the achievements are shared with the public.

In terms of consumer prices, the vice minister said the government has eased price pressure by taking preemptive measures, such as capping gasoline prices.

"Since February this year, the government has been operating an interagency task force on consumer prices under the president's order," the vice finance minister said.

"We will take stern action against unfair business practices and stabilize prices in sectors closely linked to everyday life, such as school uniforms, maintenance costs, cram school tuition and telecommunications fees," he added.