SEOUL: Economic ministries briefed President Park Geun-hye on their New Year policies geared toward revitalizing the sluggish economy by boosting domestic demand and exports in a balanced way.
Just two weeks into 2016, heightening external risks coupled with persistent domestic problems make it seem hardly realistic to achieve the government’s growth target for this year, which is set at 3.1 percent, a modest improvement from last year’s 2.7 percent.
The emphasis on growth through a balance between domestic demand and exports, in the eyes of critics, is nothing but an acknowledgment that policymakers are facing increasing difficulties shoring up growth amid deteriorating external and internal conditions.
The Ministry of Strategy and Finance said it would frontload nearly 30 percent of annual fiscal spending in the first quarter and encourage public corporations and pension funds to increase investments. More companies will be asked to join nationwide sales promotion events to be held on a regular basis from this year and measures will be taken to lead more households to use reverse mortgages and give working-class families more tax benefits.
These policy efforts, however, seem to fall short of continuing to bolster domestic consumption, which helped shore up growth amid declining exports last year.
Finance Minister Yoo Il-ho, who took office Wednesday, told lawmakers during his confirmation hearing earlier this week he expected the Korean economy to achieve a 3.1 percent growth without drawing up a supplementary budget. But the new economic team to be led by Yoo, who concurrently serves as deputy prime minister for economic affairs, will find it difficult to turn his expectation into reality as almost all effective stimulus measures have been used by his predecessor Choi Kyung-hwan.
