New finance minister prioritizes price stability, job creation

SEOUL, June 2 (Yonhap) -- South Korea's new finance minister said Thursday that his priorities as the nation's top economic policymaker are to stabilize prices and generate jobs, as he wants to ease the sufferings of low- and mid-income people.
In his inauguration speech, Bahk Jae-wan also emphasized the importance of strengthening the nation's economic fundamentals to better cushion any future turbulences, and nurturing new growth engines to achieve sustained economic growth.
"I will do my best to push for price stability and job creation with my top priority placed on stabilizing the livelihood of ordinary people," Bahk told his employees in the prepared speech. "In particular, we should keep considering market-friendly and creative options in the face of growing inflationary pressure."
His remarks are in line with his predecessor, Yoon Jeung-hyun, who had been struggling to tame inflation, driven by what he called "uncontrollable" external factors such as higher oil and commodity prices.
Earlier this year, the government declared a "war" on inflation, but it has been losing the battle as consumer prices increased more than 4 percent for the fifth straight month in May.
Fears over growing inflationary pressure promoted the government to come up with diverse measures aimed at subduing price hikes by manufacturers, cracking down on price-rigging practices by companies and unloading farm products to put a lid on spiking food prices.
Bahk noted that the government should redouble its efforts to rectify what he calls "unfair" business practices while pushing for regulatory reforms and boosting market competition in an apparent move to induce price reductions.
As for the still tough job market conditions, the former labor minister said the government needs to work hard to have economic growth translate into job creation by adjusting its taxation, finance and budget systems into "job-inducing systems."
He also put emphasis on strengthening the nation's fiscal soundness as concerns are lingering over increased sovereign debt following massive government spending to survive the global financial and economic turbulence years ago.
During his meeting with reporters after the speech, Bahk said it was "inevitable" over the past years to expand government spending in the wake of the global crisis, but he said it is time to think about strengthening the country's fiscal status and achieve a budgetary balance under the changed economic situations.
Touching on capital control measures introduced by his predecessor, Bahk said that such efforts have been contributing to stabilizing the nation's financial market by easing the pace of short-term foreign debt growth.
The government is not considering additional measures, but Bahk said he will prepare for any possible problems as he understands the susceptibility of a small and open financial market like Korea to external shocks.
Asked if he will revise the government's growth and inflation targets for this year, he said he will announce new objective figures later this month by taking every possible factor into consideration.
The government currently aims to attain 5 percent growth for this year and stabilize inflation at around 3 percent. In his confirmation hearing on May 25, however, Bahk noted that the 3 percent inflation target will not be easy to achieve.
kokobj@yna.co.kr