S. Korea Stimulus Measures
World Economy

S. Korea Stimulus Measures

South Korea unveiled a set of stimulus measures on Wednesday to keep Asia’s fourth-largest economy on a recovery track in the face of falling oil prices and tumbling demand from China and other major economies.
The measures include boosting public spending by six trillion won ($4.94 billion) and lending by policy banks by 15.5 trillion won, both during the first quarter and compared with previous plans, Reuters reported.
The finance ministry said in a statement that individual consumption taxes on passenger cars would also be cut to 3.5% from 5%, effective until the end of June.
“Our economy has been recovering on the back of consumption since late last year, but economic conditions have been worsening more than expected since the start of the year while the slump in exports is deepening,” said Finance Minister Yoo Il-ho in opening remarks at a meeting with other government ministers.
Yoo has primed markets for a stimulus package as economic growth is seen under severe pressure and said the government would also focus on job growth this year as well as nurture new sectors like healthcare and sports.
The government estimates the latest measures would lift economic growth for the January-March period by 0.2 percentage points on a quarter-on-quarter basis.
Exports in January tumbled 18.5% from a year earlier, while consumer and business sentiment indicators as well as house prices all softened.
March futures on three-year treasury bonds were up early in the day, trading up 0.08 points at 110.16 on expectations the Bank of Korea may join the government and ease policy further.
The consensus is currently for rates to be unchanged for an extended period of time as household debt remains high, but with inflation inching down in January and exports suffering early in the year some analysts say they would not be surprised if the central bank cut rates soon.
The Bank of Korea last cut interest rates in June to the current record-low 1.50% and has grown less dovish since, with Governor Lee Ju-yeol stressing the importance of structural reform to achieve long-term growth.


Short URL : http://goo.gl/pf504u
  1. http://goo.gl/zvm6IC
  • http://goo.gl/FMefh4
  • http://goo.gl/rg5cMA
  • http://goo.gl/PIOvJb
  • http://goo.gl/nIWXWN

You can also read ...

Curing existing patients also decreases the number of carriers able to transmit the virus to new patients.
Goldman Sachs has outdone itself this time. That’s saying a...
Transnational organized crime is involved in all forms of illicit trade, from human trafficking networks and tobacco smuggling, to trade of counterfeit goods.
Illicit trade in any of its forms—tobacco, pharmaceuticals,...
The accumulation of bankruptcy cases means that  it sometimes takes about six months just to get  a new insolvency case admitted to court.
India’s revamped bankruptcy process is in full swing and...
The vast majority of US businesses are pass-throughs, including those owned by President Donald Trump.
The US' Congressional Budget Office warned earlier this month...
Swiss Investor Confidence Weakest Since Late 2016
Switzerland’s investor confidence deteriorated further in...
Finland’s Nordea Bank Predicts Growth to Stagnate After 2020
Finnish economic growth is set to keep its strong path this...
Argentina Gets 32 Road Project Bids
Argentina says it received 32 bids for six road projects...
Kenya Growth Slows to 4.9%
Kenya’s economy grew by 4.9% last year from 5.9% in 2016, the...