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Rep. Kang Bong-kyun, chief policymaker of the ruling Uri Party.
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Ruling party lawmaker criticizes interest rate hike
Rep. Kang Bong-kyun, chief policymaker of the ruling Uri Party, said that the government should adjust its macroeconomic policies to boost the national economy. In an interview with KBS Radio on July 4, Kang urged the government to take special measures to prevent the economic growth rate from declining, suggesting a lowering of the interest rate and execution of government-led projects earlier than scheduled. Kang’s remarks were expected to hold influence, coming ahead of an economic conference in which Prime Minister Han Myeong-sook and Finance and Economy Minister Han Deok-soo will participate. Kang criticized the central Bank of Korea’s raising the national interest rate, saying, "The core national inflation rate has stayed at 2.2 percent, and prices of commodities are expected to stabilize in the second half of the year. Therefore, it is unreasonable to raise the interest rate." He called the move simply "following" the recent interest rate hike in the U.S."The government didn’t consider an early execution of its financial policies because it predicted the national economy would be strong in the first half of the year," Kang said. Because the economy was sluggish during the first half of 2006, however, he said the government "should adjust its policies for the second half of this year." Kang said that the real-estate transaction tax will be sharply reduced from 4 percent to 2.5 percent. "Because of this change," he said, "I will revise the local tax laws as soon as the National Assembly convenes."
