Candidate Chang-yong Lee for the governor of the Bank of Korea announced that he would allow inflation and rely on signal policies with a capital-priority policy as ‘Korea’s high inflation system with high interest rates in line with the US growth rate’.
Candidate Lee said, “The growth rate of the United States is in the mid-4% range, and there is room for a rapid rate hike. Korea's economic growth rate is not as robust as that of the US, so we have to watch the rate of interest rate hike more cautiously than in the US. announced on the 19th.
At the personnel hearing, Lee said, "Inflation is a factor on the supply side, and there is also a supply chain problem. Fiscal spending on the demand side has increased a lot, and when social distancing is over, the consumption that has not been used so far will increase and inflation may rise. "It is unfortunate for the BOK, but if we do not give a signal in advance to catch (inflation) through a rise in interest rates, inflation may rise further due to expectations," he said.
Candidate Lee said in the real estate policy, “The goal is housing stability and housing supply for the common people.
Candidate Lee continued, “There is no need to go as fast as in the United States because the domestic economy has priority in determining interest rates.” There is a possibility of an interest rate inversion due to monetary tightening in the United States, but I think this should be tolerated,” he said.
In its World Economic Outlook on the 19th, the IMF lowered Korea's growth rate by 0.5% from 3.0% in January to 2.5%, and the consumer price inflation rate rose 0.9 percentage points from 3.1% to 4.0%.
Regarding the maintenance of low interest rates in Korea, Candidate Lee said, "There is a possibility of capital outflow, but as the economic fundamentals are good, there will be no major problems in the short term." It is not a problem, but the Bank of Korea's growth priority policy said, "Growth may weaken compared to the previous forecast due to the global economic slowdown."
Akio Makabe, a professor at Hosei University, said, “The trade deficit is not a temporary phenomenon in Korea, which has grown economically by importing resources and mass-producing and exporting semiconductors, etc. high,” he said on the 11th.
A former economist at the Mizuho Research Institute, he wrote in a Japanese economic magazine (Modern Business), “The price of goods and services is rising worldwide and concerns about inflation are growing rapidly. There are concerns about it,” he said.
Regarding the signal-focused policy, candidate Lee said, "If the economy slows significantly, we will adjust it on a case-by-case basis, but since the inflation sentiment (expected inflation) is rising, I will give a signal even if it is not popular, so that I will concentrate on not causing a further increase in inflation." .
Seong Tae-yoon, a professor of economics at Yonsei University, said on the 19th, “I think stagflation has been going on since the beginning of this year.