Finance minister vows to map out aggressive fiscal policy

Finance minister vows to map out aggressive fiscal policy

South Korea’s finance minister said Friday that he will come up with aggressive fiscal measures for the second half in order to get over rising downside pressures at home and abroad, giving hints that the government is considering drawing up an extra budget.

“The government will seek economy-boosting measures along with aggressive fiscal intervention,” Finance Minister Yoo Il-ho said in a breakfast meeting with the heads of state-run and private think tanks in Seoul.

“The economy shows tepid signs of recovery as faltering exports weigh heavily on domestic demand, dragging down facility investment and undermining the job market.”

South Korea’s exports fell 6 percent on-year in May, marking a record 17-month losing streak, while industrial output fell 2.8 percent in April from a year ago, posting negative growth for the second consecutive month and widening its downward pace from March.

The top economic policymaker also saw the economic conditions for the second half remain unfavorable inside and outside South Korea due to heightened financial uncertainties throughout the world, stemming from a possible U.S. rate hike and a potential British withdrawal from the eurozone.

Yoo’s latest comment came a day after he made a change in his stance on the necessity of drawing up an extra budget to prop up the economy.

“We are seeking a proper policy mix including a supplementary budget,” he said after a meeting with ruling and opposition party lawmakers on Thursday.

The finance minister had adamantly opposed plans to raise an extra budget to achieve the government’s 3.1 percent growth target for 2016, while major international organizations and local think tanks cut the forecast below the 3 percent line.

The government will announce a new set of stimulus measures later this month.


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