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To: DJBEINO who wrote (2547)	2/10/1998 2:41:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

02-11-98 Fears Deepen over Price Hikes; Analysts Say Weak Won Prompts Inflation Pressures By Lee Kap-soo Staff reporter Korea could see spiraling price hikes among commodities next month unless inflationary pressure stemming from the won's meltdown against the dollar is subdued. Mostly affected by the won's weakness against the greenback, public utility charges and industrial goods prices have soared to record highs these days, stirring concern about a critical level of inflation, local market watchers said yesterday. Following a 16- to 22-percent surge in express and cross-country buses, basic taxi fares are expected to go up an average of 23 percent, from 1,000 won to 1,300 won, starting Monday. Fare on international flights is also scheduled to rise by 15 percent beginning tomorrow, and subway fare is expected to follow suit in the near future. Citing a sharp rise in import prices of raw materials in the wake of the won's hefty depreciation against the dollar, domestic manufacturers of industrial goods have also raced to jack up the prices of their products. Prices of construction materials, agricultural and livestock goods, and vegetables also recently rose significantly. For instance, Maeil Dairy Industry Co., which hiked prices of powdered milk by 11.7 percent last December, also raised the prices 7 to 10 percent further. Nam Yang Dairy Products Co. is planning to increase the prices of powdered milk by a similar level in the immediate future. Following successive price hikes of 12 to 13 percent in November and 32 to 33 percent in December, wheat flour manufacturers, including Cheil Foods & Chemicals and Dae Han Flour Mills, are poised to jack up prices 12 to 15 percent further before the end of the month. In the wake of the sharp rise in wheat flour prices, prices of Ramyon (instant noodle), bread, cookies and many dishes at restaurants have been raised significantly. Paper manufacturing companies and liquor makers have also raised prices of their products by 12 to 18 percent. In an attempt to offset a hefty rise in special excise taxes and raw material prices, home appliance makers recently jacked up prices of air conditioners, refrigerators, washing machines, and audio products by 10 to 15 percent. Although the government and the IMF have agreed to keep the inflation rate for consumer prices at below 9 percent this year, the inflation rate is expected to reach a 12-percent level unless domestic enterprises' race for price hike discontinues, market watchers cautioned.