[Weekly Outlook] March Inflation Approaching 4% Increase... National Debt Expected to Break Record High

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Economy and Finance, is speaking while presiding over the Emergency Economic Central Countermeasures Headquarters meeting held at the Government Seoul Office in Jongno-gu, Seoul, on the 31st. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Sejong=Reporter Kwon Haeyoung] This week, the main focus is whether last month's consumer price inflation rate, to be announced on the 5th, has surpassed 4%.

According to related ministries on the 3rd, Statistics Korea will announce the consumer price trends for March on the 5th.

Consumer prices have maintained a 3% range inflation rate for five consecutive months since October last year. The surge in international oil prices and grain prices due to Russia's invasion of Ukraine, along with rising dining-out costs, have pushed prices up, and there is speculation that last month's inflation rate may have exceeded 4%.

Accordingly, Deputy Prime Minister and Minister of Economy and Finance Hong Namki will hold a price-related ministers' meeting on the same day to decide on matters such as the reduction of fuel tax and the expansion of the scope of applied tariff quotas. The plan to increase the fuel tax reduction rate from the current 20% to 30% is considered likely.

The Ministry of Economy and Finance will also announce the results of the 2021 fiscal year national settlement on the 5th. It will finalize South Korea's financial statements including assets and liabilities from last year and confirm indicators such as fiscal balance and national debt. The key issue is how much the national debt has expanded from KRW 1,985.3 trillion in 2020 to 2021, and it is expected that last year also set a record for the highest debt.

The Bank of Korea will announce the provisional results of the international balance of payments for February on the 8th. The current account surplus for January recorded USD 1.81 billion (provisional estimate, approximately KRW 2.2359 trillion), but the surplus decreased by nearly USD 5 billion compared to the same period last year. This is due to the shrinking trade surplus caused by the sharp rise in import prices of oil and raw materials. Since the strong oil prices continued in February as well, attention is focused on how much the current account surplus has decreased.

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