S Korea economy faces headwinds: BOK
SEOUL South Koreas central bank chief said yesterday that strong headwinds at home and abroad are putting Asias fourthlargest economy in a tough situation moving forward.
The South Korean economy has been pulling off steady growth since last year, but it has become hard to be optimistic due to negative external and internal conditions, Bank of Korea (BOK) Governor Lee Ju-yeol said in an inauguration ceremony for new monetary policy board member Lim Ji-won.
Lim, a former senior economist at JP Morgan, will start her fouryear term yesterday. She is the second female member of the BOK board in its history.
Uncertainties are still high as major economies are going through monetary normalisation and (there are) trade tensions between the United States and China, said Lee. On the domestic side, employment remains sluggish.
The South Korean economy expanded 1.1 per cent in the first quarter, a turnaround from a 0.2 per cent drop in the previous quarter. The BOK said the first-quarter figure is in line with the BOKs forecast of 3 per cent overall growth for 2018.
But experts noted that prospects are not very bright in the face of the latest negative economic data and rising global downside risks.
The countrys job creation remains weak, the number of new jobs in the backbone manufacturing sector declined amid restructuring in the labour intensive shipping and automaking industries. Earlier, the central bank lowered its estimate for job creation to 260,000 from an earlier projection of 300,000.
At the same time, household debt is on a steady rise and surpassed 1,450 trillion won (US$1.34 trillion) last year, with numbers continuing to rise.
Also, consumer price inflation has been hovering around 1.5 per cent for months, far lower than the BOKs target of 2 per cent.
The BOK is charged with supporting the economy and sustaining consumer prices and financial stability at the same time, said Governor Lee.
South Korea will seek drastic deregulation and provide support to foster innovative growth, the countrys finance ministry said yesterday.
Under a set of support measures, the government will provide funding and other incentives to eight key sectors such as smart farms, smart cities, fintech, drones and electric vehicles and artificial intelligence. YONHAP