[Economic Schedule] Government Announces Lunar New Year Livelihood Stabilization Measures... Attention on Comprehensive Real Estate Tax Reduction Plan

Ministry of Economy and Finance Announces Follow-up Enforcement Decree Revision Plan Following Last Year's Tax Law Amendments
Bank of Korea Releases '2021 Q3 Financial Flow Statistics'

(Photo) [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] The government will announce measures to stabilize livelihoods ahead of the Lunar New Year this week. Attention is also focused on whether there will be measures to reduce the comprehensive real estate holding tax.

According to the Ministry of Economy and Finance on the 1st, the government will announce the Lunar New Year livelihood stabilization measures next week. Earlier, at the end of last year, Lee Eok-won, 1st Vice Minister of the Ministry of Economy and Finance, presided over the 'Policy Review Meeting and Vice Ministers' Meeting on Prices' at the Government Seoul Office and stated, "The government recognizes that proactive response is most important and, after discussions with related ministries, will finalize and announce the 'Livelihood Stabilization Measures' in the first week of January next year."

With growing burdens on grocery prices ahead of the Lunar New Year, the timing for finalizing and announcing the livelihood stabilization measures was moved up by one week compared to last year.

Statistics Korea announced that the consumer price index rose by 2.5% in 2021, and by 3.7% in December compared to the same month of the previous year. Vice Minister Lee diagnosed that the causes of price increases include the sharp rise in energy and raw material prices, supply bottlenecks, and demand recovery due to economic reopening. He explained, "Next year's consumer prices will show an upward pressure in the first half due to strong international oil prices and base effects, followed by a gradual slowdown in the rate of increase, showing a high-in-the-first-half and low-in-the-second-half pattern," but also noted, "There are high uncertainties such as the spread of COVID-19, the development of the Omicron variant, and global supply chain disruptions."

The Ministry of Economy and Finance plans to announce the follow-up enforcement decree revision plan related to last year's tax law amendments on the 6th. The revision of the tax enforcement decree is expected to include measures to reduce the comprehensive real estate holding tax burden for houses that individuals inevitably hold, such as inherited houses, houses owned by Jongjung (clan associations), community villages and cooperative-type houses, and traditional preserved old houses, i.e., houses not held for speculative purposes. The government is reportedly considering broader exclusion of inherited houses when calculating the number of houses.

On the 7th, the Bank of Korea will release the '2021 Q3 Financial Flow Statistics.' This will allow confirmation of how much funds economic agents such as households, companies, and the government raised and where they spent them in the third quarter of last year.

The status of South Korea's foreign exchange reserves as of the end of last year will also be disclosed on the 5th. The foreign exchange reserves turned to a declining trend after five months, and attention is focused on whether the same trend continued in December last year. As of the end of November last year, foreign exchange reserves stood at 463.91 billion USD, down by 5.3 billion USD from the record high of 469.21 billion USD at the end of October of the same year.

This content was produced with the assistance of AI translation services.