À̹ÌÁö È®´ë [Photo by Yonhap]
South Korea will go all out to prevent an economic contraction in the second half of this year after the country suffered negative growth in the first half, finance minister Hong Nam-ki said Thursday.
During the government¡¯s ninth economic emergency council meeting held at the Seoul government complex on Thursday, Hong said that ¡°preventing negative growth in the second half¡± is the utmost task of the government after it focused mostly on mitigating shocks from the coronavirus to the economy in the first half.
Korea has been struggling to recover its economy from the pandemic-driven fallout. The economy contracted 1.4 percent in the first quarter ended March from the previous quarter. The Bank of Korea estimated the country¡¯s growth rate in the first half to be negative 0.5 percent.
The government has been putting out efforts to cushion the economic shocks from the COVID-19 pandemic with the introduction of a slew of stimulus measures including three extra budgets this year.
During the meeting, Hong said the government faces ¡°a grave situation¡±, citing a 6.7 percent fall in industrial production in April and May, each, and an 18-percent plunge in daily average exports in June.
The finance minister concerned that the coronavirus crisis may prolong, citing signs of the second wave of COVID-19 across the globe after the reopening of major economies.
But Hong also saw some signs of recovery in economic activity.
He noted that retail sales expanded for two straight months in April (5.3 percent) and May (4.6 percent) and the declining trend in exports slowed down from a fall in the 20 percent range in April and May to a drop of 10.9 percent in June. Exports to China increased for the first time in June at 9.5 percent from a contraction.
Hong also noted how Organization for Economic Cooperation and Development (OECD) and International Monetary Fund (IMF) presented the highest economic growth outlook for Korea among advanced economies and global credit rating agency Fitch Ratings revised up Korea¡¯s economic growth from -1.2 percent to -0.9 percent.
Hong expected that government measures to boost the economy would begin to take effect in the second half and called for the National Assembly to approve its third supplementary budget plan for early execution.
Last month, the government unveiled the largest-ever supplementary budget of 35.3 trillion won ($29.4 billion), which is the third of its kind this year, to help salvage the economy.
By Lee Eun-joo
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]