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S. Korea's 2017 growth may top gov't goal of 2.6 pct.: finance minister

All News 15:01 June 19, 2017

SEJONG, June 19 (Yonhap) -- South Korea's economic growth may overshoot the government target of 2.6 percent this year if a large-scale extra budget is implemented fully and current economic conditions persist, the nation's economic czar said Monday.

Finance Minister Kim Dong-yeon, who doubles as the deputy prime minister for economic affairs, made the upbeat forecast in an interview with Bloomberg TV. It marks the first time since his inauguration that Kim has hinted at hiking the government's growth forecast.

"This year's economic growth could exceed the government goal if the current trend of economic fundamentals last, and the supplementary budget is implemented thoroughly," said Kim, who took office as the first economic chief of the Moon Jae-in government May 9.

In a bid to spur the economy, the government has submitted an 11.2 trillion-won ($10 billion) supplementary budget forecast to help create some 110,000 jobs.

Unveiling the extra budget early this month, the government predicted it to add 0.2 percentage point to the country's economic growth for all of 2017.

Given that, analysts said there is a high possibility of the new government revising upward its growth forecast for this year when it comes up with its economic policies.

When the extra budget bill was unveiled May 5, Kim didn't comment on a possible upgrade in the country's growth projection as he was still Moon's nominee for finance minister.

South Korean Finance Minister Kim Dong-yeon (L) meets with his Chinese counterpart Xiao Jie (2nd from R) on the southern resort island of Jeju on June 16, 2017, on the sidelines of the second annual meeting of the Asia Infrastructure Investment Bank (AIIB). (Yonhap)

Kim also expressed hope that South Korea's recent hosting of the annual meeting of the Asia Infrastructure Investment Bank (AIIB) will help improve its relations with China, which has soured over Seoul's deployment of an advanced U.S. missile defense system.

"South Korea hopes China will put aside political issues in order to establish close bilateral economic ties," Kim said. "Seoul wants Beijing to terminate measures against South Korea as early as possible."

The China-initiated AIIB, set up in 2016 to fund infrastructure projects in Asia, wrapped up its three-day second annual meeting on South Korea's southern resort island of Jeju on Sunday. It adopted resolutions accepting three new members -- Tonga, Argentina and Madagascar -- bringing its total approved membership to 80.

During the conference, Kim held a one-on-one meeting with his Chinese counterpart Xiao Jie, the first gathering between the finance ministers of the two trade partners.

Despite Beijing's strong objection, the installation of a Terminal High Altitude Area Defense (THAAD) battery has been under way at a former golf course in southeastern South Korea since early March.

Seoul and Washington say the move is designed to better counter missile threats from North Korea, while China insists that it will hurt its strategic security interests and has taken what appears to be retaliatory steps against South Korean businesses.

Kim, meanwhile, said South Korea has yet to receive a formal request from the United States to renegotiate a bilateral free trade agreement.

"We have not received any formal request for renegotiation from the U.S. side. The free trade deal is beneficial to both sides," Kim said.

Donald Trump has condemned the free trade pact as a "job-killing" deal and a "disaster," sparking worries in Seoul that he could push for a renegotiation of the agreement. The free trade deal -- which went into effect in 2012 -- has widely been considered a symbol of the economic alliance between the two nations.

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