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Finance minister vows all-out efforts to revive economy

All News 16:51 March 03, 2016

SEOUL, March 3 (Yonhap) -- South Korea's finance minister pledged on Thursday to mobilize every possible means to revive the economy, which has been struggling amid faltering exports and slowing domestic demand.

"Based on a cool-headed assessment of the current economic situation, the government will take all measures available," Finance Minister Yoo Il-ho said at a regular meeting with economy-related ministers in Seoul. "Since the beginning of the year, downside external pressures have wielded influence on the local economy."

Amid a slowdown in the Chinese economy and a free fall in crude oil prices, outbound shipments from Asia's fourth-largest economy slumped 18.8 percent in January and 12.2 percent in February.

Its industrial output, directly affected by exports, fell 1.8 percent in January from a month earlier.

On the domestic front, retail sales retreated 1.4 percent in January, compared to a 3 percent on-quarter gain in the fourth quarter of last year, due largely to a 28.1 percent slump in car sales.

The Seoul government announced an extra stimulus package last month to prop up the economy, spending 40 percent of its 330.6 trillion won (US$267.8 billion) budget for 2016 in the first three months of the year.

It also extended an excise tax-cut program, which was first intended to finish in December last year, until June this year in a bid to boost car purchases and overall consumption.

The finance minister, who also doubles as the deputy prime minister for economic affairs, said there are some signs of recovery in the economic indices in February, citing that the 12.2 percent drop in February exports narrowed from January's 18.8 percent.

"As we look closely into the data, we can find some positive signs there," he said. "Retails sales were on a roll in January if we exclude auto sales. The tax-cut extension will contribute to the upbeat trend down the road."

He said he will unveil a comprehensive plan later this month to support exporting firms and remove related trade regulations in order to make a turnaround in falling exports.

Along with the fiscal policies to invigorate the economy, Yoo called for sweeping reform in the financial and labor sectors and asked the parliament to pass controversial reform bills designed to increase flexibility in the labor and employment market.


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