SEOUL: The International Monetary Fund (IMF) has urged South Korea to act against what it describes as a “self-reinforcing downside dynamic,” since Asia’s fourth-largest economy has room for additional monetary and fiscal measures to reduce downside risks.
“There is the risk that a self-reinforcing downside dynamic could take hold … The likelihood of this scenario may not be high, but the costs could be significant. The authorities have monetary and fiscal policy space to take action if clear signs of a recovery do not emerge soon,” Brian Aitken, who spearheaded the international agency’s annual consultations with South Korea, said in a news conference on Friday.