Gov't targets sub-3% inflation in H2, to import 200 million eggs and expand food discounts

The government plans to expand discount programs for agricultural, livestock and fishery products and boost supplies of key food items — including eggs, pork and mackerel — to keep consumer price inflation below 3 percent in the second half of the year. It will also continue operating a petroleum price cap and step up on-site inspections to minimize inflationary pressure from rising oil prices.

The Ministry of Economy and Finance said Wednesday it held a deputy minister-level price meeting at the Government Seoul Complex, chaired by First Vice Minister Lee Hyeong-il, to review June consumer price trends and the progress of second-half livelihood price stabilization measures. The meeting was attended by the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Oceans and Fisheries, the Ministry of Trade, Industry and Energy, and the Ministry of Statistics, among others.

Consumer prices rose 3.2 percent year-on-year last month, extending a run of 3-percent-range inflation for two consecutive months after a 3.1 percent reading the month before. The government said it aims to bring the rate below 3 percent in the second half through policy action.

"Seafood price gains slowed and processed food prices remained relatively stable, but the overall pace of inflation edged up due to delayed vegetable growth and reduced shipments, higher livestock and agricultural prices from animal disease outbreaks, and firm oil prices," Lee said.

Seafood inflation eased to 3.7 percent in June from 5.0 percent in May, its lowest level since February last year. Agricultural and livestock product prices rose 3.2 percent, with livestock products up 6.2 percent, while petroleum prices surged 24.7 percent, pushing overall inflation higher.

The government assessed that the petroleum price cap has helped contain inflation to some degree. It estimated the cap, in effect since March, lowered June consumer price inflation by about 0.4 percentage point — meaning inflation would have reached around 3.6 percent without the measure.

With international oil prices stabilizing following the end of the Middle East war, the government cut the seventh round of maximum prices by 150 won per liter, effective June 27. As a result, the national average gasoline price fell from 2,006 won per liter on June 26 to 1,934 won on Tuesday, while diesel dropped from 1,997 won to 1,924 won over the same period.

The government plans to monitor gas station retail prices and strengthen enforcement against unfair practices to ensure the price cap reduction is quickly passed on to consumers.

Measures to stabilize food prices will also be rolled out in earnest. The government will inject 350 billion won ($226 million) — a record amount — into discount programs covering all categories of agricultural, livestock and fishery products in July and August.

For eggs, pork and mackerel, where prices remain elevated, the government will increase supply by lowering procurement costs and expanding imports. For eggs in particular, it will import an additional 200 million fresh eggs between July and August, committing a total of 99.7 billion won to stabilize supply and demand.

In the second half, the government will expand quota tariffs on food items and reduce industry cost burdens such as distribution and logistics expenses to minimize factors driving price increases. The Ministry of Agriculture, Food and Rural Affairs, the Ministry of Oceans and Fisheries, and the Korea Customs Service will also conduct joint customs and distribution inspections in July to closely monitor the effects of quota tariffs and whether price reductions are being passed through.

"I ask all related ministries to make every effort to execute livelihood price stabilization measures swiftly so that second-half inflation can be kept below 3 percent," Lee said. "We will continue to strengthen on-site inspections to ensure that all measures translate into real price relief that consumers can actually feel."