President Yoon Suk Yeol said Wednesday that the government would freeze public utility fees controlled by the central government, including highway tolls, postal and railroad fees, in the first half of this year, while asking municipalities and private companies to join the efforts to contain steep increases in transportation and communications charges.
He also urged banks to return their profits to the people suffering from high interest rates.
“The government will focus all policies on people’s livelihood and look out for the difficulties of the common people and the vulnerable with extraordinary determination,” Yoon said at a meeting held to discuss contentious economic matters.
Referring to the government’s efforts to overcome the economic difficulties caused by high prices, interest rates and exchange rates, Yoon said, “The difficulties of the vulnerable and ordinary people remain in the aftermath of the steep rise” of prices and interest rates in addition to the rise of heating and public transportation costs.
The Korea Development Institute announced its economic outlook on Feb. 9, raising its annual inflation forecast from 3.2 percent to 3.5 percent. The US also reported a day earlier that its consumer price index rose 6.4 percent on-year last month, high than the market expectation of 6.2 percent.
Yoon urged the private sector to share the burden, stressing that services provided by telecommunications and finance companies are widely seen as essential for the people, like other public utility services.
“As they have a great impact on households with difficulties, I think it is necessary for the industries to voluntarily take part in sharing the pain for the sake of stability,” he said.
The remarks echoed his earlier words during a meeting of senior secretaries on Monday. There, Yoon asked banks to return their profits to the people, particularly those who are self-employed and who own small businesses.
Yoon's remark came after news reports on banks enjoying a "bonus party," with their earnings hitting new records over a series of interest rate hikes.
According to Yoon’s senior economic secretary Choi Sang-mok, the president said banks should reduce their "net interest margins" and protect vulnerable borrowers, to sharing the burden of borrowing costs. He was referring to the gap between the interest banks charge on loans compared to the amount they pay out on deposits.
Yoon also said banks should “build up enough (capital) reserves” when profits are high so that they could support the people in difficult times with profits reserved.
Soon after the meeting presided by Yoon, the Korea Federation of Banks announced that it would promote a “bank social contribution project” worth more than 10 trillion won ($7.7 billion) over three years. The budget includes 3 trillion won for low-income and low-credit people, 3 trillion won for economically marginalized small and medium-sized enterprises and 4 trillion won for microfinance.
Later in the afternoon, the Seoul Metropolitan Government said it has decided to delay fare increases for the subway and buses from the first half of this year to the second half.
The city said last month that it would raise fares by 300 to 400 won in April, citing their mounting operating deficits.
