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(LEAD) Finance minister vows to take contingency measures

Industry 17:52 December 12, 2018

(ATTN: RECASTS throughout to highlight possible contingency measures

SEOUL, Dec. 12 (Yonhap) -- South Korea's new finance minister pledged Wednesday to take contingency measures in case of financial volatility amid concerns that external risks could weigh on Asia's fourth-largest economy.

Hong Nam-ki, the minister of economy and finance, said the government will maintain round-the-clock monitoring of financial markets and risk factors, though he didn't elaborate on contingency measures.

The move is designed to "minimize any negative side-effects external uncertainties could have on South Korea's economy and financial markets," Hong said in a meeting with relevant officials in a government building in central Seoul.

He cited U.S. rate hikes, the end of quantitative easing in Europe, a trade dispute between the U.S. and China, as well as possible economic slowdowns in the U.S. and China, as risk factors.

South Korea -- a small, open economy -- depends heavily on exports and foreign capital investment, a situation that makes it vulnerable to external shocks.

Also Wednesday, Hong said the government will front-load next year's budget to ensure that planned investments can be quickly carried out.

On Tuesday, the Cabinet approved a plan to front-load 281.4 trillion won(US$249 billion) in the first six months of next year as part of efforts to boost the economy.

The figure accounts for 70.4 percent of next year's planned spending of 399.8 trillion won based on tax revenue, according to the finance ministry.

His comments came amid concerns of an economic downturn.

In October, the Bank of Korea trimmed its economic growth outlook to 2.7 percent for 2018 from its earlier projection of 2.9 percent. It is lower than the finance ministry's 2.9 percent outlook and the International Monetary Fund's 2.8 percent prediction.

The South Korean economy grew 3.1 percent in 2017 and 2.9 percent in 2016.

Separately, Statistics Korea said South Korea's jobless rate stood at 3.2 percent last month, up 0.1 percentage point from a year earlier.

Hong Nam-ki, the minister of economy and finance, attends a meeting of economy-related officials at a government building in central Seoul on Dec. 12, 2018.

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