Deputy PM Koo says 3% growth, $40,000 per capita GNI 'highly likely' this year

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol said Friday that South Korea achieving 3% annual growth and a per capita gross national income of $40,000 this year has become very likely.

The government said it will sustain the growth momentum while extending a fuel tax cut and pursuing an amendment to the price stability law to guard against potential price and supply chain shocks from rising tensions in the Middle East.

Koo chaired a special ministerial task force meeting on everyday prices at Government Complex Seoul on Friday, according to the Ministry of Economy and Finance. He said the Bank of Korea's second-quarter real GDP growth rate of 0.6% quarter-on-quarter, announced Thursday, showed that growth momentum was continuing strongly from the first quarter. "The likelihood of achieving 3% annual growth and a per capita GNI of $40,000 this year has become very high," he said.

He added that the government would spare no effort to realize what he called the "3-4-5 Vision" — 3% growth, exports ranking among the world's top four, and per capita income of $50,000.

However, Koo expressed caution about the possibility of renewed volatility in global oil prices and supply chains as tensions in the Middle East have flared again recently.

"Rising international oil prices and heightened volatility could create difficulties on the price and supply chain fronts," he said. "We will not let our guard down and will prepare thoroughly."

The government decided to extend by two months — through the end of September — a temporary fuel tax cut that had been set to expire at the end of this month. A ban on hoarding urea and urea water solution will also be extended by one month through the end of August.

By contrast, the government said it would ease storage limits and lift sales restrictions under the anti-hoarding order for syringes, citing improved supply conditions.

The eighth round of maximum petroleum prices, which take effect at midnight Saturday, are scheduled to be announced at 7 p.m. Friday following consultations among related ministries.

The government also plans to address regulatory gaps identified during its response to the Middle East situation. It intends to file an amendment to the price stability law in August that would tighten sanctions on market-disrupting conduct such as hoarding and allow for faster disposal of seized goods.

"We will actively address the regulatory shortcomings identified during our response to the Middle East war, and use this as an opportunity to strengthen the supply chain response framework and improve the effectiveness of price stabilization measures," Koo said.

In addition, the government said it would step up on-site inspections to verify that tariff reductions are actually translating into lower consumer prices, and pursue related regulatory improvements to ensure that the effects of tariff cuts are properly reflected at the retail level.