Finance minister nominee sees elevated inflation pressure for time being

SEOUL, May 2 (Yonhap) -- South Korea's finance minister nominee said Monday the country's consumer prices could top the March growth rate of 4.1 percent for the time being as inflation is under upward pressure amid soaring energy costs.

Rep. Choo Kyung-ho, also named to double as the deputy prime minister for economic affairs, made the remarks during a parliamentary confirmation hearing.

"Inflation is likely to remain unstable for the time being in a way that could further worsen above the March growth rate of 4.1 percent," Choo said.

South Korea's consumer prices grew more than 4 percent for the first time in more than a decade in March as Russia's war with Ukraine has jacked up energy and other commodity prices. In February, inflation rose 3.7 percent on-year.

The International Monetary Fund recently lowered its 2022 growth outlook for the South Korean economy to 2.5 percent while raising its inflation projection to 4 percent. The Bank of Korea aims to keep annual inflation at 2 percent over the medium term.

Choo said the South Korean economy is in a "grave" situation where low economic growth could be entrenched while inflation runs high.

"The country could be stuck in a trap of low growth. South Korea's potential economic growth rate has continued to decline as the government-led growth has sapped vitality in the private sector," he added.