“The price of a shopping cart can be calculated by spending several tens of billions of won… “Even $50,000 is not a dream.”

2024-05-09 20:22:06

[尹대통령 취임 2주년 회견] economic field
Even though I already spent 150 billion won, the prices are still high… Point out that “fixing prices using the budget is an optical illusion”
National income has been around $30,000 for 7 years… “Semiconductor, time is a subsidy” Willingness to fight for speed
President holds first ‘economic review meeting’ after conference

President Yoon Seok-yeol emphasized that the rising shopping cart prices, which are considered the biggest challenge for the Korean economy, can be sufficiently controlled with tens of billions of won in discount support. He also said, “We will open an era centered on the common people and the middle class,” and “even a national income of $50,000 is not a dream.”

However, even though the government is already spending more than 100 billion won to control the prices of agricultural, livestock and fishery products, food prices are not easily controlled. While national income has remained in the $30,000 range for seven years, some say that no specific methodology, such as structural reform, has been proposed.

● “It’s an optical illusion, not an actual price drop.”

At a press conference marking the second anniversary of his inauguration on the 9th, President Yoon said, “Even if we do not spend a lot of money, we can control shopping cart prices by investing only a few tens of billion won, providing discount support, and properly operating the quota tariff on imported products.” It is interpreted that the government has shown confidence that it can reduce the burden of soaring prices by utilizing finances.

However, the government’s ‘price control’ situation is still not easy. Although the government has been investing 150 billion won in price stabilization funds since March of this year, the prices of some fresh foods are still remaining high. According to the Korea Agro-Fisheries and Food Trade Corporation (aT), the retail price of pears on the 9th was 51,553 won for 10 pears (based on report/product), which is 87.2% higher than last year. Prices of apples (20.5%), cabbage (53.0%), and dried seaweed (27.0%) are still higher than a year ago.

Seok Byeong-hoon, a professor of economics at Ewha Womans University, said, “The government’s discount support does not actually lower prices, but is more of an optical illusion,” adding, “We need measures to address the sharp decline in agricultural production due to climate factors.”

It is not easy to just invest finances. According to the fiscal trends announced by the Ministry of Strategy and Finance on this day, the national budget deficit accumulated through March of this year was calculated to be 75.3 trillion won. This is the highest ever in the first quarter (January to March). In just three months this year, it has reached 82% of the government’s forecast for this year (deficit of 91.6 trillion won).

President Yoon also said, “Standard & Poor’s (S&P), one of the world’s top three credit rating agencies, predicted that our per capita gross domestic product (GDP) will be $40,000 in 2026,” adding, “We are well aware of the trend of economic growth led by the private sector.” “If we maintain it, per capita income of $50,000 is not a dream,” he said. Korea’s GDP per capita exceeded $30,000 for the first time in 2017 at $31,600, but remained in the $30,000 range until last year.

Hyemi Yoo, a professor of financial engineering at Hanyang University, said, “Korea’s economic growth has clear limits as it fluctuates depending on the semiconductor export cycle. In order to increase the growth rate without relying on the cycle, productivity must be increased through structural reforms such as labor reform.” said.

● “Semiconductor support, time subsidy”

Regarding support for the semiconductor industry, he emphasized his will to fight for speed, saying, “Time is a subsidy.” President Yoon said, “I am thinking of lifting regulations so that power, water, infrastructure, and factory construction (etc.) can be carried out quickly and help the government proceed with projects at a speedy pace.” However, regarding the possibility of providing cash subsidies for semiconductor investment, he drew a line, saying, “If you deduct as much tax as possible within the scope of financial conditions, it will be a subsidy.”

An official from the semiconductor industry said, “The government and local governments must actively take action to ensure that speed is actually possible, rather than just making a declaration. There are still unresolved issues such as opposition from residents in various places, including Yongin, where the semiconductor cluster will be located.” There are also complaints from the industry that support in the form of a later corporate tax reduction rather than a subsidy does not take into account the nature of the industry, which involves a large initial investment cost burden.

At the press conference, President Yoon made it clear that he would continue to ease market-oriented real estate regulations and reduce taxes, and also reaffirmed his intention to push for the abolition of financial investment income tax. President Yoon held the first ‘Economic Issues Review Meeting’ at the Yongsan Presidential Office in the afternoon after the press conference and said regarding real estate project financing (PF), “Funds will be smoothly supplied to normal PF businesses with sufficient business feasibility and some businesses with insufficient business feasibility will be provided.” “Proceed with restructuring and reorganization.”

Sejong = Reporter Kim Do-hyung [e-mail]
Sejong = Reporter Song Hye-mi [e-mail]
Reporter Kwak Do-young [e-mail]

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2024-05-09 20:22:06