South Korean economy faces downside risks: minister
The nation's economy is heading toward uncertain territory due to a variety of factors at home and abroad which could restrict its growth, said Deputy Prime Minister and Finance Minister Hong Nam-ki on Thursday.
In a meeting for economic policies at the Government Complex Seoul, Hong cited three main factors– quarantine, external factors and fiscal situation — that may weigh on the growth of gross domestic product.
He clarified that the government would push for main policies — including supporting microbusiness owners, stabilizing consumer prices and supporting economic recovery — during the first half of 2022. The incumbent administration is to finish its tenure on May 9.
For the economic reinvigoration sector, the minister said exports should continue to play a crucial part in leading the recovery, as it did last year.
To boost outbound shipments, the government is moving to take countermeasures against the rising cost of logistics among export-oriented enterprises, he said.
The minister's remarks came amid growing concerns over a discord in fiscal policies between the government and the central bank. The government plans to prosose an extra budget of some 14 trillion won ($11.8 billion) to support small businesses hit by the pandemic while the central bank has been seeking to curb inflation with a series of rate hikes.
The Bank of Korea raised the benchmark interest rate by a quarter percentage point to 1.25 per cent, in its third rate hike since August, amid the fastest growth in consumer prices in the last 10 years.
Meanwhile, an analysis from the Organization for Economic Cooperation and Development suggested that Korea's economic growth could slow down in the coming months.
Comments