S Korea maintains fiscal expansionary, monetary easing policies
- Source: Xinhua
- [16:31 September 17 2009]
- Comments
The South Korean government will keep up its fiscal expansionary policies, with an L-shape steady recovery likely down the road, the finance minister said Thursday.
During a press conference with foreign correspondents in Seoul, Finance Minister Yoon Jeung-hyun reiterated that it is premature to execute an exit strategy.
"The exit strategy should be initiated in tandem with international coordination," as "implementing an exit strategy alone and too early will weigh down the Korean economy," said Yoon.
Yoon also stressed that his government was closely consulting with the Bank of Korea (BOK) on maintaining current monetary easing policies, and thus having "shared views on" the issue of a possible interest hike.
BOK Governor Lee Seong-tae last week hinted at a possible interest hike, saying a raise in the nation's key rate interest may come even amid the government pushing for monetary easing policies.
Amid speculations rising on a dispute between the central bank and the finance ministry, the minister noted that the two bodies hold "the same" views on the current market situation, and that the government is firm on keeping its current policy with respect to the key interest rate.
Yoon, pointing that the economy is "beginning its climb out of the deeper recession," showed confidence in South Korea's economic conditions.
"We can be 'reasonably optimistic about the outlook for the economy, though caution is warranted," Yoon said.
Yoon's remarks came amid diverse economic and financial indicators hinting at Asia's fourth largest economy is recovering at a faster-than-expected rate.
Along with the South Korean key index, KOSPI, hitting at a 15-month high and the local currency approaching the 1,100-won mark, the state-run Korea Development Institute (KDI) revised up its growth outlook from a negative 1.5 percent growth to a 0.7 percent contraction for 2009.
"I believe this surprising performance is mainly due to the active role of our government's policy responses," the minister said, promising the government's more active roles in tackling remaining risks, such as sluggish private investment and consumer demand
