Korea Seeks Extra Stimulus Plan
Strategy and Finance Minister Yoon Jeung-hyun speaks about his economic policy direction at the Gwacheon Government Complex, south of Seoul, Tuesday. / Yonhap
The top economic policy maker vowed to keep the growth rate above zero this year through more stimuli, credit easing, and deregulation.
Strategy and Finance Minister Yoon Jeung-hyun predicted Tuesday that the economy will get better in the second half of 2009, forecasting the current account surplus to top $13 billion, compared with a shortfall of $6.4 billion last year, the first deficit in 11 years.
Yoon said the government will make the labor market more flexible and will target creating more jobs. He added that without drastic measures, the economy would lose 200,000 jobs this year.
Yoon said without additional domestic demand, the economy will shrink 2 percent this year from 2008, slashing the government's official growth target of 3 percent.
If so, the nation will see its gross domestic product (GDP) fall for the first time since 1998, when output declined 6.9 percent in the aftermath of the Asian financial crisis.
He said that the minus 2-percent growth projection was based on those of private economic research institutes, stressing he will mobilize all possible pump-priming measures, including more fiscal spending, to stimulate domestic demand and raise the 2009 growth rate to above zero. The International Monetary Fund even said the nation's GDP would drop by 4 percent from 2008.
``However, the economy will improve in the second half of the year and start growing again in 2010. As for this year, the government will set aside more money to bolster sagging domestic demand. We will consult with the governing Grand National Party (GNP) about a supplementary budget and submit a bill to the National Assembly for passage next month,'' the minister said.
By Lee Hyo-sik (Staff Reporter)
# The Korea Times [FEB 11 2009]
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