The most urgent task for the new year would be to tackle regulatory, industrial and labor reforms that have been stalled for more than 10 years as the Korean economy faces more downside risks and slower growth in 2019, said the finance minister on Monday.

Hong Nam-ki, the deputy prime minister for the economy, said in a New Year’s statement the government would leverage all available tools to stimulate consumption and investment.

“Korea’s per capita gross national income topped $30,000 this year for the first time,” said Hong. “But the livelihood of the everyday people fails to match this new reality.”

Korea’s inflation in December slowed to 1.3 percent on year to end 2018 at an annual rate of 1.5 percent, far below the target range of 2.0 percent. Factory output in November contracted 1.7 percent on month, with capital investment dropping 5.1 percent, the sharpest month-on-month decline since June.

The country’s economic outlook is also grim. The finance ministry cut its economic growth projections for 2018 and 2019 to the lowest in six years due to deepening trade disputes, monetary tightening in major economies and overall financial instability. It forecast Asia’s fourth-largest economy to post an annual growth of between 2.6 and 2.7 percent this year and next, down from its July projections of 2.9 percent this year and 2.8 percent for 2019.

Hong pledged to bolster the country’s social security net and step up efforts to create a fairer economy while advancing the structural changes needed to take the Korean economy to the next level.

“At the end of the day, the government’s goal is to create jobs,” said Hong. To this end, he called for a concerted effort from the public and private sectors to address the decade-long challenges of deregulation, industry restructuring and labor market reforms.

Korea’s job market is at its worst since the crisis-hit period. The country lost 909,000 jobs in November, crossing the 900,000-mark for the first time since 1999 in the wake of the Asian financial crisis. Unemployment rate reached 3.2 percent, the highest November figure since 2009 when it stood at 3.3 percent following the 2008 global financial crisis.

By Chung Seok-woo and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]