ID :
90311
Wed, 11/18/2009 - 11:48
Auther :
Shortlink :
https://www.oananews.org//node/90311
The shortlink copeid
S. Korea won't end stimulus until full recovery: official
SEOUL, Nov. 17 (Yonhap) -- South Korea will not end its stimulus measures until the real economy and the financial market return to normal, as the country's recovery remains fragile, a senior economic policymaker said Tuesday.
The South Korean economy has yet to bounce back fully though it grew 2.9 percent
on-quarter in the July-September period, the fastest expansion in more than seven
years and the third consecutive quarterly growth.
"The current recovery remains weak, not robust," Yoon Jong-won, head of the
finance ministry's economic policy bureau, told a global conference on expected
key agendas for the G-20 summit to be held in South Korea next year.
"Stimulus measures should remain in place until the real economy and the
financial market regain their footing," he said. "The timing of adopting an exit
strategy will hinge on the financial and real-sector conditions."
South Korea's better-than-expected growth results have given rise to calls for
exit strategies, or policies that would roll back the unprecedented fiscal and
monetary policies introduced to stimulate the sagging economy.
The South Korean government passed a massive extra budget, cut taxes and provided
credit guarantees and recapitalization funds for the financial sector while the
Bank of Korea (BOK) slashed its benchmark interest rate to a record low.
Yoon said the nation's private sector is still unable to support itself without
state stimulus measures, while local banks are also under pressure from potential
losses from problem loans.
Against this backdrop, South Korea's exit plan, if any, should be gradual in
order to help the economy get back to a normal and sustainable path, he said.
Meanwhile, a ranking BOK official said the central bank will consider asset
prices, economic output and financial market conditions before conducting an
interest rate hike and move in step with other central banks.
"The central bank will carefully weigh the timing of a rate increase to guarantee
the sustainability of the recovery," Kim Jae-chun, deputy governor of the BOK
said, "Excessive monetary easing, however, could lead to a rise in debts and an
asset bubble."
On Thursday, the central bank kept its interest rate at the record low of 2
percent for a ninth straight month, citing economic uncertainties linger.
pbr@yna.co.kr
(END)
The South Korean economy has yet to bounce back fully though it grew 2.9 percent
on-quarter in the July-September period, the fastest expansion in more than seven
years and the third consecutive quarterly growth.
"The current recovery remains weak, not robust," Yoon Jong-won, head of the
finance ministry's economic policy bureau, told a global conference on expected
key agendas for the G-20 summit to be held in South Korea next year.
"Stimulus measures should remain in place until the real economy and the
financial market regain their footing," he said. "The timing of adopting an exit
strategy will hinge on the financial and real-sector conditions."
South Korea's better-than-expected growth results have given rise to calls for
exit strategies, or policies that would roll back the unprecedented fiscal and
monetary policies introduced to stimulate the sagging economy.
The South Korean government passed a massive extra budget, cut taxes and provided
credit guarantees and recapitalization funds for the financial sector while the
Bank of Korea (BOK) slashed its benchmark interest rate to a record low.
Yoon said the nation's private sector is still unable to support itself without
state stimulus measures, while local banks are also under pressure from potential
losses from problem loans.
Against this backdrop, South Korea's exit plan, if any, should be gradual in
order to help the economy get back to a normal and sustainable path, he said.
Meanwhile, a ranking BOK official said the central bank will consider asset
prices, economic output and financial market conditions before conducting an
interest rate hike and move in step with other central banks.
"The central bank will carefully weigh the timing of a rate increase to guarantee
the sustainability of the recovery," Kim Jae-chun, deputy governor of the BOK
said, "Excessive monetary easing, however, could lead to a rise in debts and an
asset bubble."
On Thursday, the central bank kept its interest rate at the record low of 2
percent for a ninth straight month, citing economic uncertainties linger.
pbr@yna.co.kr
(END)
