Samsung TV and Hyundai Car Prices Also Controlled Under Moon Administration

Government Includes Private Export Items in Price Control Responsibility System
Some Departments Express Discomfort Over "Anti-Market Administrative Economy"

[Sejong=Asia Economy Reporter Kwon Haeyoung] To curb soaring prices day after day, the government has confirmed that it included automobiles and home appliances produced by companies in the scope of price management. Last month, the Ministry of Economy and Finance introduced the 'Price Responsibility System by Ministries,' ordering each ministry to manage public utility fees such as electricity and gas charges, as well as agricultural and livestock products and petroleum, whose stockpiles the government can adjust. However, this time, products and services sold by private companies were also included in the management targets. In particular, automobiles and home appliances are non-essential goods, which are far from everyday living prices. Within government ministries, concerns have been raised that this is an anti-market, government-controlled economy and a d?j? vu of failure, citing the 'MB Price Index' introduced and failed during the Lee Myung-bak administration in 2008.

According to government ministries on the 13th, the Ministry of Economy and Finance, upon introducing the price responsibility system by ministries, reportedly enumerated specific items such as sashimi, private academy fees, movie ticket prices, automobiles, and home appliances, demanding focused management. This is in line with the intention that each ministry should take responsibility for the prices of items under their jurisdiction as inflation accelerated, with last year's annual consumer price increase rate hitting 2.5%, the highest in 10 years.

However, as the scope of price management included not only daily necessities but also items whose prices should be determined by market autonomy, some ministries have pushed back. For example, in the case of automobiles, which the Ministry of Economy and Finance selected as a major management item, it is impossible to suppress prices only in Korea while competing with companies worldwide. It is analyzed that 'carflation' has already begun in earnest, as automobile raw material prices have surged and production disruptions due to the shortage of vehicle semiconductors have overlapped. In the U.S., the average transaction price of new cars was $45,000 in September 2021, a 12% increase compared to the previous year.

Some within ministries compare this to the Lee Myung-bak administration’s selection and management of 52 major daily necessities such as flour, ramen, and cabbage to stabilize the lives of ordinary people, complaining that "these items were not even included in the MB Price Index."

A government ministry official expressed dissatisfaction, saying, "Does it make sense for the government to control prices of goods in the private sector?" and "Most ministry officials are bewildered by the Ministry of Economy and Finance’s anti-market price management policy."

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