Choo emphasizes coordinated monetary and fiscal policies to combat inflation


By Kang Yoon-seung

SEOUL, July 19 (Yonhap) — South Korean Finance Minister Choo Kyung-ho highlighted the necessity of a joint effort between monetary and fiscal policies to address the ongoing global inflation during a Group of 20 finance meeting earlier this week, his office said Wednesday.

During the two-day G20 Finance Ministers and Central Bank Governors Meeting that ended in Gandhinagar, western India, on Tuesday, Choo noted that South Korea was able to limit inflation by limiting its expenditures while implementing tariff-rate quotas on major goods.

South Korea has been utilizing tariff rate quotas on key food items, including pork and mackerel, as well as industrial products, such as naphtha, to tame inflation.

Choo said these efforts have prevented an excessive transmission of global raw material price increases into the domestic market.

Owing to these efforts, South Korea’s year-on-year consumer price growth slowed for the fifth consecutive month in June, falling below 3 percent for the first time in 21 months at 2.7 percent, data showed earlier this month.

“We also welcome international cooperation aimed at strengthening the resilience of the supply chain, including the Indo-Pacific Economic Framework,” Choo also said during the meeting.

Meanwhile, the Bank of Korea (BOK) kept its key interest rate unchanged at 3.5 percent last week.

It marked the fourth consecutive time that the central bank has stayed put following rate freezes in February, April and May. The rate freezes came after the bank delivered seven consecutive rate hikes from April 2022 to January 2023.

Finance Minister Choo Kyung-ho (L) speaks during a session at the G20 Finance Ministers and Central Bank Governors Meeting in Gandhinagar, western India, on July 17, 2023, in this photo released by the Ministry of Economy and Finance. (PHOTO NOT FOR SALE) (Yonhap)

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