Prime Minister Han: "High inflation to improve around October... House price decline has little impact on financial system"

Confirmed Review of WTO Complaint Consideration Over Disadvantages to Korean Electric Vehicle Companies Under US Inflation Reduction Act

Prime Minister Han Duck-soo is delivering opening remarks at the 'High-level Party-Government Consultation Meeting' held at the Prime Minister's Official Residence in Jongno-gu, Seoul on the 28th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Ki-min Lee] Prime Minister Han Duck-soo said on the 28th, "Prices of oil, food products, mainly meat prices, and wheat prices are currently showing a downward trend. Most experts expect things to improve around October."

Prime Minister Han made these remarks during an appearance on KBS's 'Sunday Diagnosis Live,' discussing future inflation prospects. When asked if prices would stabilize from October, he added, "It is expected to get a little better."

Regarding the base interest rate hike, he explained, "The extent and speed of our country's rate hikes may be somewhat less than those of the United States, which is what we expect."

Han said, "The Federal Reserve has clearly prioritized inflation control in its policy," adding, "Since our country's inflation rate is around 5-6%, lower than the U.S.'s 10%, if we carefully examine and respond to the economy, the likelihood of Korea following the U.S. economy into a recession is low."

On the decline in the value of the won-dollar exchange rate, he responded, "The weakness of the won overall helps exports and the management of the international balance of payments." However, when asked if the government would tolerate the won's depreciation, he replied, "That is not the case. It is not a principle to structurally manipulate the won's value up or down in a positive sense."

Regarding the issue of Korean electric vehicle manufacturers being disadvantaged by the U.S.-enacted Inflation Reduction Act (IRA), he reiterated the position of considering a World Trade Organization (WTO) complaint. Han said, "The WTO is for resolving trade disputes between countries, so we need to consider filing a complaint. More urgently, we need to focus on discussions with the U.S. government."

On the decline in apartment prices mainly in the metropolitan area, he diagnosed, "This is a process of normalizing by reducing the large amount of liquidity released worldwide, so prices are clearly showing a downward trend." He added, "We will ensure that prices do not crash too sharply and collapse. Currently, the biggest concern is the impact of real estate prices on the entire financial system, but the possibility of that happening is currently judged to be low."

Regarding the appointment of the vacant ministers of Education and Health and Welfare, he said, "We are making efforts to appoint them as soon as possible," adding, "We are doubling our verification efforts. There are currently several candidates undergoing verification."

When asked to compare his current position with when he served as the last prime minister under the Roh Moo-hyun administration, Han answered, "The biggest difference seems to be that the political sphere has become considerably more confrontational."

Asked to evaluate his first 100 days in office, he said, "I believe the foundation has been firmly established, especially in security issues and the restoration of alliances," adding, "In economic matters, I think we have firmly established the framework for regulatory reform." However, he noted, "The insufficient point is communication; I think dialogue with the National Assembly is still not enough, so I need to make more efforts."

Meanwhile, at the 3rd high-level ruling party-government meeting held at the Prime Minister's official residence in Samcheong-dong, Seoul, Han said, "The ruling party and government have held two high-level and occasional meetings to discuss urgent livelihood economic issues, COVID-19 measures, and flood damage countermeasures," but humbly acknowledged, "Despite these efforts, it is also true that they have not fully met the public's expectations."

He continued, "The government must visit the field more frequently to continuously check and supplement policy effectiveness and, if necessary, make detailed explanations to the public," emphasizing, "At the first regular National Assembly session since the launch of the Yoon Seok-youl administration, the Prime Minister's Office will lead the establishment of a cooperative system among related ministries to make every effort to pass bills and budgets as planned."

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