Industry Minister Lee Chang-yang has vowed measures to strengthen export competitiveness and maximize nuclear energy in the face of major economic challenges over surging inflation and fuel costs.
"We are now facing multiple crises, as high inflation and surging energy prices have given a shock to our economy. As we are highly dependent on imports for our energy needs, we are fully feeling the pains," Lee told reporters Tuesday.
In June, the country's consumer prices soared 6 percent on-year, marking the fastest clip in nearly 24 years due mainly to high energy costs. Dubai crude, South Korea's benchmark, spiked 58 percent on-year to $113.27 per barrel on average in June.
High energy costs caused the country to suffer a trade deficit for three months in a row from April, with the total deficit for the January-June period reaching the highest figure for any first-half period.
"We should boost our export competitiveness as much as possible. ... The government will come up with comprehensive measures to support the semiconductor sector and such related industries as batteries, displays, artificial intelligence and robots," Lee said.
Exports have logged on-year expansions for 20 straight months through June on the back of solid demand for chips and petroleum products, but the rise slowed down last month, ending 15 straight months of double-digit growth.
Lee also reiterated the government's drive to promote the nuclear energy sector, which is necessary "to buffer the impact of the energy shock."
President Yoon Suk-yeol's government scrapped the previous administration's nuclear phase-out policy and pledged to expand the country's generation of nuclear power to more than 30 percent of its total energy creation by 2030.
The minister also stressed the government's push to increase tax incentives for corporate facility investment and accelerate deregulation with a goal to expedite investment and achieve economic growth.
"The key to tame inflation is how to boost productivity," Lee said. "How to promote corporate investment will be crucial to overcome the potential stagflation." (Yonhap)