PPP: "The Three Highs Cannot Be Solved with a Supplementary Budget"

[Financial News] The People Power Party (PPP) argued on the 7th that the recent trend of high oil prices, high inflation, and a strong dollar caused by the Middle East crisis cannot be overcome simply through expansionary fiscal policy such as a supplementary budget. Instead, the party says the government should pursue long-term measures like diversifying energy supplies and focus on protecting vulnerable groups. The PPP plans to deliver this position at the Ruling-Opposition-Government Consultative Body on People’s Livelihood and the Economy to be held later in the day with President Lee Jae-myung.
At the party policy meeting held that day at the National Assembly of the Republic of Korea, PPP floor leader Song Eon-seok stated, "In the first quarter of this year, service prices rose 2.4% year-on-year, and prices for personal services such as dining out climbed 3.2%, marking a fifth consecutive quarter of increases in the 3% range. If the won–dollar exchange rate becomes fixed at around 1,500 won, upward pressure on import prices could intensify." He went on, "The problem is that our policy response capacity is extremely limited. Because the fundamental cause of rising prices lies in an energy supply shock originating from the Middle East, it is difficult to resolve the issue directly through monetary or fiscal policy."
Song added, "The most worrying scenario is when we move beyond simple price hikes to an actual shortage of goods. Not only could gasoline prices rise, but at some point we may face situations where supplies cannot be secured regardless of price. In that case, both logistics and production could contract simultaneously, dealing a fatal blow to the real economy." He stressed, "If severe summer heat overlaps with instability in energy supplies, the impact could go beyond industrial disruptions and threaten public safety. Rather than focusing only on short-term responses to energy prices, we must diversify energy supply sources, secure raw material supply chains, and concentrate on practical measures to ensure physical supply and protect vulnerable groups."
The PPP intends to convey these concerns at a luncheon meeting scheduled for the same day with President Lee Jae-myung and the leaders and floor leaders of both the ruling and opposition parties.
Policy Committee Chairperson Jeong Jeom-sik said, "Under the triple burden of a high exchange rate, high prices, and high interest rates, people’s lives have reached a point where it is hard to endure. In this complex crisis, today’s (7th) meeting of the Ruling-Opposition-Government Consultative Body on People’s Livelihood and the Economy carries very significant meaning." He continued, "This meeting must not be used merely as a tool to pass a supplementary budget or as a symbolic political event. In line with its name, there must be discussion of concrete and actionable measures that can address macroeconomic issues such as the exchange rate, prices, and interest rates, and ease the burden on ordinary citizens and small and medium-sized businesses."
Jeong went on to say, "For the Ruling-Opposition-Government Consultative Body on People’s Livelihood and the Economy to function effectively and continue in practice, cooperation between the ruling and opposition parties is essential. The Democratic Party of Korea (DPK) must move away from unilateral and dogmatic legislative overreach and demonstrate a willingness to cooperate." Addressing President Lee Jae-myung, he urged, "For this meeting to lead to tangible results, you need to recognize the opposition as a partner that shares responsibility for state affairs. Please listen sincerely to the voice of the opposition leader and create an environment where substantive policy consultations can take place."
haeram@fnnews.com Lee Haeram Reporter