[사설] Worst inflation since the financial crisis… don’t you have a clue

The consumer price index, which had soared to the 4% level for two months in a row, recorded the highest in 13 years and 6 months in April. It’s hard to find prices that don’t go up. There are even gloomy forecasts that inflation may exceed 6% in the second half of the year. Such high inflation, which overlaps with high interest rates and high exchange rates, is driving the Korean economy into a crisis due to the ‘three high’ phenomenon. Moreover, there is currently no way out. The price problem is also expected to put a great burden on the Yoon Seok-yeol administration, which will be inaugurated next week.

According to the announcement of the National Statistical Office on the 4th, the consumer price index for last month was 106.85, up 4.8% from the same month last year. Earlier, the inflation rate in March was 4.1%, breaking the 4% level for the first time in more than 10 years, but it rose 0.7 percentage points more in just one month. This is the highest inflation rate since the 4.8% rise in October 2008 during the financial crisis. The cost of living for the 144 items that people consume the most, such as rice, ramen, and eggs, also rose by 5.7 percent, the highest since the financial crisis.

In particular, the rate of increase in oil prices last month reached a whopping 34.4%. Oil prices have continued to rise for 14 months since March last year. In particular, in recent years, it has shown a high rate of increase in the 30% range for two consecutive months, leading the overall price increase. Processed foods also rose 7.2% from a year ago. Noodles rose 29.1%, cooking oil 22.0%, and bread 9.1%. Not only housewives’ shopping, but also office workers’ lunch prices have risen terribly. The sighs of ordinary people are bursting out everywhere.

The bigger problem is that the government has no all-round solution. This is because countries around the world have released huge funds to overcome the corona virus, and external supply factors such as a surge in international oil prices are leading the price increase. In addition, Ukraine, which accounts for one-third of the world’s wheat exports, and Russia, the world’s third largest oil producer, are at war, further fueling inflation. In addition, there is even a crisis of stagflation due to the weakening of the won and the blockade of cities in China.

The Yun Seok-yeol government should prepare in advance so that there are no disruptions in the smooth supply and demand of energy such as oil and gas and basic food resources such as wheat. Exchange rates, interest rates, and financial management must also be dealt with precisely. As the demand for a wage increase naturally increases if inflation continues for a long time, the minimum wage issue needs to be approached with caution. Inflation management is the biggest challenge facing the Yun Seok-yeol administration.