South Korea's Lee says price stability a priority

SEOUL, March 23 (Reuters) - South Korean President Lee Myung-bak has declared that containing inflation has become a more urgent task in economic policy than lifting growth or creating more jobs, the presidential office said on Sunday.

"People are faced with damage due to a crisis situation that has started in the United States," Lee said on Saturday during a joint interview with four business newspapers, the Blue House noted in a statement released late on Sunday.

"We are in a situation that price stability has become more important than 7 percent economic growth or job creation," Lee was quoted as saying.

He has stuck with a 6 percent economic growth target for this year, up from 5.0 percent last year, even in the face of slowing global demand. He has said he would lay the foundation for the economy to grow by 7 percent on average for 10 years.

South Korea's annual inflation rate stood at 3.6 percent in February, marking it the third month in a row that it exceeded the central bank's target band of between 2.5 percent and 3.5 percent set for 2007-2009.

It was his first formal interview with any newspaper since taking office last month. Lee ended 10 years of liberal rule by winning December's election in a landslide after a campaign focused on boosting Asia's fourth-largest economy.

Lee also urged communist North Korea to begin addressing the whereabouts of hundreds of prisoners of war who went missing during the 1950-53 Korean War and civilians believed to have been abducted by the North afterwards, the Blue House said.

Lee's remarks on relations with the North came as the communist country has kept silent about the inauguration on Feb. 25 of Lee's government or about his policy in general.

He said South Korea will continue humanitarian aid to the impoverished North without linking the issue to international efforts aimed at ending the North's nuclear arms programme. (Reporting by Cheon Jong-woo and Jack Kim, Editing by Yoo Choonsik/Rory Channing)