Finance ministry to prioritize stabilizing inflation next year

South Korea's finance ministry said Wednesday it will put the top priority on stabilizing consumer inflation next year as the country faces a buildup in price pressure amid rising prices of raw materials and farm products and the economic recovery.

The government plans to beef up the monitoring of the supply of key farm produce closely linked to people's livelihoods and freeze public utility bills in the first quarter of next year.

The Ministry of Economy and Finance picked measures to stabilize inflation as a key part of its 2022 policy plans reported to President Moon Jae-in.

The ministry recently sharply revised up its 2022 inflation outlook to 2.2 percent from its earlier estimate of 1.4 percent. Its inflation projection is higher than the 2 percent forecast by the Bank of Korea (BOK).

The country's consumer prices rose 3.7 percent in November from a year ago, the fastest on-year gain in a decade and accelerating from a 3.2 percent increase in October. The BOK aims to keep annual inflation at 2 percent over the medium term.

The government forecast this year's consumer prices to spike 2.4 percent. The BOK puts its 2021 inflation outlook at 2.3 percent.

The ministry said the growth of consumer prices will slow next year compared with this year as the growth of oil prices is easing and the supply of agricultural products has increased.

"But inflation is expected to remain at a high level for the time being as demand-pull inflationary pressure will likely rise in line with the recovery of domestic demand, and prices of processed food and dining out will increase," it said. (Yonhap)