SEOUL - SOUTH KOREA is considering cutting taxes and tariffs on oil and other products to try to curb inflation, President Lee Myung Bak said on Tuesday as figures showed a sharp rise in prices.
Seoul has made fighting inflation its economic priority this year and pressure rose on the government to act after data showed prices continued upwards in January due to the increasing cost of food and energy.
In a televised interview Mr Lee described the issue as a serious problem and said: '(The government) is reviewing whether to reduce taxes and import tariffs on things like oil prices.' The consumer price index rose 4.1 per cent in January from a year earlier, Statistics Korea said on Tuesday, and increased 0.9 per cent month-on-month.
Those figures compared with December's 3.5 per cent year-on-year rise and 0.6 per cent month-on-month. Prices of fresh food products jumped 30.2 per cent from a year earlier and oil and energy costs rose 10.9 per cent.
The central bank last month unexpectedly raised the benchmark interest rate 25 basis points to 2.75 per cent in a bid to tame rising prices and also unveiled a set of other measures to keep inflation in check.
Mr Lee stuck to its forecast of around five percent economic growth this year, following 6.1 per cent in 2010. 'But I am worried about inflation... the government needs to work at the forefront of efforts to tame inflation,' he said, describing rising food prices as an international concern. -- AFP
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