World Economy

S. Korea Minister Insists Impeachment Won’t Hurt Economy

Yoo Il-ho talks to foreign correspondents in Seoul.Yoo Il-ho talks to foreign correspondents in Seoul.

South Korea’s chief economic policymaker said Sunday that the impeachment of the country’s president will have a limited impact on the economy, as well as the financial markets, vowing to implement current economic policies in a consistent mode.

Last week, the country’s parliament overwhelmingly voted to impeach President Park Geun-hye, immediately suspending her authority. There have been concerns that Asia’s fourth-largest economy, currently faced with a protracted slump at home and abroad, may be thrown into further turmoil after the impeachment, Yonhap reported.

“The impact following the impeachment seems to have had a limited impact on the market, and I promise that I, as a control tower for the economy, will manage the economy through close cooperation with related agencies,” Finance Minister Yoo Il-ho told foreign correspondents in Seoul.

Millions of Korean citizens have staged candlelight vigils in recent weeks, calling for Park’s ouster and thorough investigations into a corruption scandal involving Park’s confidante and aides.

Yoo said South Korea has clear-cut procedures during the post-impeachment period, so that there are no concerns about chaos.

“The economy is faced with an array of uncertainties, including a US rate hike and policy shifts in the new US government, but we will manage the economy by maintaining economic policies in a consistent manner,” Yoo said.

“As was seen in the past, South Korea has overcome numerous crises, namely as the 1997 financial crisis and the 2008 crisis, but all citizens joined forces to tackle them and take a leap forward,” the minister said.

Fiscal and monetary authorities and financial regulators will stay alert monitoring the local markets that have been facing volatility on negative external and internal factors, including Brexit and Donald Trump’s upset win in the US presidential election, he said.

He appealed to global credit rating agencies, foreign press and local businesses that Korea’s economy is intact and stable, despite the political turmoil.

Yoo urged the private sector through five business associations including the Korea Federation of Small and Medium-Sized Enterprises and the Korean Chamber of Commerce and Industry, to operate their businesses as usual.

He asked the heads of the associations to “pursue their investment and recruitment plans,” while the association called on the economic agency to follow through on its policies.

Although the central bank believes the impeachment would have a “very limited impact” on the economy, it could pose a downside risk should the political uncertainty persist in the long run.


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