Finance Minister Hong Nam-ki said Monday the government needs to mobilize all available policy means to tame inflationary pressure and stabilize the housing market in the new year.

Hong also said the country will prioritize supporting small merchants hit hard by the COVID-19 pandemic and vulnerable people and strengthen social safety nets.

"The government faces an urgent need to stabilize inflation and the housing market at an early date by mobilizing all available means," Hong said.

South Korea's consumer inflation grew at the fastest pace in 10 years last year due to surging energy costs and high prices of farm products.

Consumer prices rose 2.5 percent on-year in 2021, accelerating from a 0.5 percent gain the previous year. It marked the fastest on-year gain since 2011, when consumer inflation spiked 4 percent.

The growth of inflation is expected to slow this year compared with last year, but consumer prices are forecast to run at the 2 percent range amid global supply bottlenecks, high oil prices and the economic recovery.

The Bank of Korea (BOK) put its 2022 inflation outlook at 2 percent. The finance ministry expected consumer prices to grow 2.2 percent next year.

The country's housing prices have somewhat stabilized in recent months, affected by tighter lending rules and the central bank's rate hikes. But the housing market remains unstable due largely to an imbalance of housing supply and demand.

The BOK said in its biannual report on financial stability that a rise in housing prices and high household debt serve as major potential risks to financial stability. (Yonhap)