South Korea Minister Vows 3% Growth

South Korea’s finance minister said Sunday that the government will consider additional stimulus measures if necessary to achieve its goal of 3% growth this year amid concerns about multiple risks, including North Korea, trade protectionism and a possible construction slowdown.

In an interview with Yonhap News Agency, Kim Dong-yeon also said the government will push for a balanced two-track sustainable growth policy anchored on industrial innovation and broad-based income distribution.

South Korea raised its forecast of this year’s growth from 2.6% to 3% in late July based on a recovery in exports and investment.

Kim expressed confidence in the goal and the government’s resolve to put South Korea’s growth back in the 3% range in the longer term. “The government’s economic forecast includes its will to reach the target as well,” he said.

According to central bank data, Asia’s fourth-largest economy grew 1.1% in the first quarter and then 0.6% in the second quarter, while its exports remain in positive terrain for 10 months in a row.

The national assembly approved a 11 trillion-won ($9.9 billion) extra budget in July to increase jobs and boost the economy. “The government will look into the effect of the extra budget and other situations and, if necessary, will consider additional measures to prop up the economy,” the minister said. “At this moment, I will do my best to reach the 3% growth goal.”

The top financial policymaker said the government will put more emphasis on fiscal expansion in line with President Moon Jae-in’s “income-led growth” pledge through boosting the welfare and job creation sectors.

The government’s 2018 budget plan called for 429 trillion won ($382.6 billion) in spending for 2018, up 7.1% from this year’s 400.5 trillion won, the fastest one-year increase in nine years. It said the increased outlay is aimed at bolstering household income, with policymakers saying it can increase consumption with the help of various policy tools.

It will take a long time and cost a lot to change the entire frame of our economy and society to tackle the low growth and deepening polarization, said the finance minister.