South Korea’s economy is facing numerous risks, including protracted low growth and low inflation, which requires the government to keep up its efforts to reinvigorate the economy by stimulating consumption and corporate investment, the finance minister said Thursday.
“Our economy is confronting the risks of low growth and low inflation as domestic demand recovery is being delayed,” Finance Minister Choi Kyung-hwan said in a parliamentary audit session, adding that external conditions are not favorable either, posing a risk to exports, which have served as a main driver for the country’s economic growth in past decades.
“We will run our macroeconomic policy in an expansionary manner until the economic recovery is solid. … The 41 trillion won ($38.7 billion) stimulus package will be carried out without delay, and regulations that were introduced when the market overheated will be rationalized,” he noted.
He also said that the government will do its best to boost corporate investment, inducing flows of corporate profits to households and strengthening the overall growth potential of the country’s economy.
Since taking office in mid-July, Choi has announced a broad range of stimulus measures with a sense of urgency that the economy might be slipping into a protracted period of low growth due to uncertainty at home and abroad.
They include fiscal support, tax code revisions and deregulation intended to boost corporate investment and household income. Most of the measures require law revisions before they can be implemented, and concerns mount that the divided parliament has become a major “risk factor” for the government’s economic policies. (Yonhap)
