Finance minister-designate stresses inflation management

SEOUL, May 25 (Yonhap) -- South Korea's finance minister-designate said in a parliamentary confirmation hearing on Wednesday that he will place priority on price stability while managing the country's macro-economy more flexibly for stable economic growth.
"I'll do my best to stabilize prices and create jobs in order to stabilize the lives of the working class," said Bahk Jae-wan, currently labor minister and named as the minister of Strategy and Finance in a Cabinet reshuffle earlier this month. "I'll come up with creative and market-friendly measures to deal with upward inflationary pressure, which stimulates inflation expectation and would lead to a structural inflation."
Bahk said that he would raise the government's 2011 inflation outlook of 3 percent, suggesting a flexible macroeconomic managing plan.
The country's consumer prices jumped 4.7 percent in March from a year earlier, surpassing the upper ceiling of the Bank of Korea's 2-4 percent inflation target band for the third month in a row, although President Lee Myung-bak has called for tight inflation control.
The major state-run think tank Korea Development Institute (KDI) also raised its inflation projection for Korea to 4.1 percent earlier this week, citing spiking crude oil prices, which affect product and service prices in South Korea as the nation depends heavily on imports for its energy needs.
Job creation is another target to vitalize the economy, he said.
"Job creation would lead people to earn an income and spend money and eventually result in economic growth. It's a virtuous cycle," said Bahk. "To revive the growth-employment cycle, I'll change the government policies and systems in a way to encourage employment."
He said that he will push forward the government's plans to reduce income and corporate taxes for high-income earners and top-tier companies, which are strongly opposed by opposition lawmakers. The opposition have argued that such tax cuts are intended to benefit the wealthy only.
The 56-year-old designate also said that he would not consider lowering oil tax rates to ease the financial burden on people, despite the growing demand for tax cut amid surging crude oil prices.
All minister nominees are subject to parliamentary confirmation hearings, though the National Assembly has no power to veto the designations.