KDI '경기부진' 진단…"소비 둔화, 수출 부진"
A state-run think-tank says the nation's economy continues to weaken amid external uncertainties.
With such conditions expected to linger for some time,... the Seoul's finance chief once again stressed the need for expansionary fiscal action.
Kim Min-ji help us look beyond the digits.
Times are tough for the South Korean economy, and in the near term, it seems the situation will likely stay that way.
The Korea Development Institute said Monday... that slowing domestic demand and weakening exports are causing overall economic activity to stagnate.
Private consumption rose 1-point-4 percent in April from a year ago slower than the average 1-point-7 percent growth posted in the first quarter.
Exports long the backbone of the country's economy dipped over nine percent on year in May,... extending the downward streak for a sixth straight month.
"We don't see it as a crisis, but overall economic activity is slow... because of unfavorable conditions at home and abroad,... especially the escalating global trade tensions. A recovery in exports or consumption in the short-term appears unlikely at the moment and things could get worse depending on how the U.S.-China trade conflict plays out, given that they are Seoul's main trading partners."
And in light of such risks,... South Korea's finance chief Hong Nam-ki and IMF Managing Director Christine Lagarde shared views on the need for Seoul to take expansionary fiscal policies.
They met on the sidelines of the G20 finance ministers' meeting in Japan over the weekend.
The IMF had recommended that South Korea take expansionary measures,... including a supplementary budget... to support growth and job creation.
The South Korean government is waiting for parliament to approve its 5-point-6 billion U.S. dollar extra budget bill.
"I believe that expansionary fiscal policies are the right solution for a declining economy because it has certain effects on recovering the economy. However, if the government wants to recover and stimulate the economy through expansionary measures, the size needs to be huge, and for that purpose, we need political agreement from different parties and the Korean people,... but the current size of the expansionary budget is not enough to recover the Korean economy."
The extra budget falls short of the IMF's recommendation of about 0-point-5 percent of the country's GDP,... which is roughly 7-point-6 billion dollars.
Kim Min-ji, Arirang News.
