World Economy

South Korea Vows to Boost Efforts for Recovery

South Korea Vows to Boost Efforts for Recovery
South Korea Vows to Boost Efforts for Recovery

South Korea’s finance minister pledged to step up policy efforts to help Asia’s fourth-largest economy gather upward momentum in the midst of a global recovery.

In a meeting with Moody’s officials, Finance Minister Yoo Il-ho said the South Korean government will focus its fiscal policies on boosting consumption and investment and make constant efforts to deal with external and internal risks such as household debts, rising trade protectionism and geopolitical issues, Yonhap reported.

He also said the country will manage to carry out sweeping reform in the corporate sector and solidify growth potential by actively coping with structural challenges such as low fertility and technology-driven industrial changes.

The minister, who also doubles as the deputy prime minister for economic affairs, is on a week-long trip to the United States to attend the Group of 20 finance ministers meeting.

Alastair Wilson, in charge of global sovereign rating at Moody’s, said there are positive signs that the South Korean economy is on a recovery track.

Moody’s kept its rating on South Korea at a record high of Aa2, with a stable rating outlook. Aa2 is the third-highest rating on the credit table, with only six other countries out of the Group of 20 advanced and developing nations currently holding that rating.

Meanwhile, the Hyundai Research Institute in Seoul revised up its 2017 growth forecast for the world economy to 3.5% from 3.4%.

The HRI said in a report the United States has entered the “Goldilocks economy” of sustained growth and low inflation as the world’s largest economy pulls off moderate growth on the back of a low jobless rate and rising private consumption and corporate investment.

It said China is also gaining recovering momentum stemming from a solid improvement in domestic demand and investment.

The eurozone economy is showing some signs of recovery in consumption and inflation thanks to years long quantitative easing, while Japan has sustained steady growth on an uptick in employment and exports.

Economic improvement in emerging countries also lends support to the global upside trend, with India, Russia and Brazil expected to post positive growth on rising oil prices.

The HRI noted that South Korea, which depends on trade for more than 75% of its gross domestic product, may benefit from the global optimism.

Asia’s fourth-largest economy saw its exports rise 13.7% in March for five months in a row since November, raising hopes that brisk exports help the entire economy bottom out.

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