Seoul delays raising utility rates

SEOUL, Oct. 9 (Yonhap) -- The government said Thursday it will delay a plan to raise utility rates as it struggles to balance a contracting economy against higher energy costs.

South Korea relies almost entirely on imports for its fuel needs. Seoul has been
looking for a way to recoup ballooning energy costs, but has been stuck on the
issue of timing. It had originally planned to raise gas prices by nearly 8
percent and electricity costs by 5 percent in September.
"The government will decide the timing of the hike by taking into consideration
economic conditions and global oil prices," the Ministry of Knowledge Economy
said in a statement.
The economy grew 4.8 percent on-year in the second quarter, the weakest expansion
in more than a year. Domestic consumption has tapered while exports remained
robust.
Earlier in the day, the central bank cut its key interest rate by a quarter
percentage point to 5 percent in a surprise move to calm financial turmoil.
On Tuesday, Finance Minister Kang Man-soo said that the global economic crisis is
beginning to impact local markets. The finance ministry said on the same day the
country will likely fall short of its yearly growth target of 4.7 percent.
sam@yna.co.kr
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