ID :
77062
Wed, 08/26/2009 - 17:07
Auther :
Shortlink :
https://www.oananews.org//node/77062
The shortlink copeid
S. Korea likely to meet 2009 growth target: finance minister
SEOUL, Aug. 26 (Yonhap) -- South Korea will likely achieve its economic growth target this year, but it is still too early to talk about ending its expansionary policy due to lingering uncertainty, the top economic policymaker said Wednesday.
In late June, the government predicted that Asia's fourth-largest economy will
shrink 1.5 percent this year on the back of massive stimulus measures. The Korean
economy expanded 2.3 percent in the second quarter from three months earlier, the
fastest growth in more than five years.
"The economy is likely to grow slower in the third quarter from three months
earlier, but if there is no unexpected shock, the local economy will likely post
positive growth in the second half, helping the country to achieve its yearly
growth target," Finance Minister Yoon Jeung-hyun said in a meeting with business
executives.
His remarks came as a set of economic data are fueling optimism that the Korean
economy is emerging from the worst downturn in more than a decade.
"Next year, the South Korean economy is expected to expand around 4 percent on
the back of a global economic recovery and a pickup in domestic demand," Yoon
said, adding, however, that the job market will likely remain sluggish despite
fledging signs of improvement.
Amid growing signs of economic recovery and record-low borrowing costs,
home-backed loans have jumped, raising concerns over an unusual spike in housing
prices and possible asset inflation. Market expectations have mounted about when
the government and the central bank will begin to unwind expansionary fiscal
policies.
"Currently, there is a need to prepare for the shift by focusing on how to exit,
but it is premature to talk about when to shift such policies into a tightening
stance," Yoon said.
On Aug. 11, the Bank of Korea froze the key interest rate at a record-low of 2
percent for the sixth straight month. BOK Gov. Lee Seong-tae has cast a more
upbeat view on the economy, suggesting that the bank is mulling a possible rate
hike down the road. The bank cut the rate by a total of 3.25 percentage points
between October and February in a bid to bolster the slowing economy.
Yoon said consumer inflation is likely to grow in a 2-percent range for the time
being due to the local currency's ascent against the U.S. dollar and slumping
demand.
In late June, the government predicted that Asia's fourth-largest economy will
shrink 1.5 percent this year on the back of massive stimulus measures. The Korean
economy expanded 2.3 percent in the second quarter from three months earlier, the
fastest growth in more than five years.
"The economy is likely to grow slower in the third quarter from three months
earlier, but if there is no unexpected shock, the local economy will likely post
positive growth in the second half, helping the country to achieve its yearly
growth target," Finance Minister Yoon Jeung-hyun said in a meeting with business
executives.
His remarks came as a set of economic data are fueling optimism that the Korean
economy is emerging from the worst downturn in more than a decade.
"Next year, the South Korean economy is expected to expand around 4 percent on
the back of a global economic recovery and a pickup in domestic demand," Yoon
said, adding, however, that the job market will likely remain sluggish despite
fledging signs of improvement.
Amid growing signs of economic recovery and record-low borrowing costs,
home-backed loans have jumped, raising concerns over an unusual spike in housing
prices and possible asset inflation. Market expectations have mounted about when
the government and the central bank will begin to unwind expansionary fiscal
policies.
"Currently, there is a need to prepare for the shift by focusing on how to exit,
but it is premature to talk about when to shift such policies into a tightening
stance," Yoon said.
On Aug. 11, the Bank of Korea froze the key interest rate at a record-low of 2
percent for the sixth straight month. BOK Gov. Lee Seong-tae has cast a more
upbeat view on the economy, suggesting that the bank is mulling a possible rate
hike down the road. The bank cut the rate by a total of 3.25 percentage points
between October and February in a bid to bolster the slowing economy.
Yoon said consumer inflation is likely to grow in a 2-percent range for the time
being due to the local currency's ascent against the U.S. dollar and slumping
demand.
