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(LEAD) Moon puts top priority on innovation to boost growth

All News 18:11 January 07, 2020

(ATTN: UPDATES with reaction of business lobby in 9th para)
By Kim Deok-hyun

SEJONG, Jan. 7 (Yonhap) -- President Moon Jae-in on Tuesday put his top economic priority on stepping up a drive for innovation to help lift the economy's recovery momentum, expressing confidence that the nation's economy will make a fresh leap this year.

In his annual New Year's address, Moon said he will "work hard to revitalize the economy by further strengthening innovation" and that the nation's economy will achieve a rebound in both exports and facility investment this year.

As his single, five-year term passed the halfway point last November, Moon also emphasized that, "This year should be when we earnestly reap tangible results from the policies my administration has carried out so far."

President Moon Jae-in delivers his New Year's address at the presidential office in Seoul on Jan. 7, 2020. Moon, among other things, urged inter-Korean efforts to create the conditions for North Korean leader Kim Jong-un's visit to South Korea. (Yonhap)

To spur an economic recovery, Moon said the government will help further encourage investment through large investment projects worth 100 trillion won (US$86.5 billion) in both the public and private sectors.

This year, the government will help nurture data, network and artificial intelligence industries and boldly invest in three new industries -- system semiconductors, biohealth and future cars.

As part of the government's initiative to boost the economy through investment, state-run institutions will expand this year's investment to 60 trillion won, up from 55 trillion won last year.

Also, the government will encourage private firms to spend 25 trillion won in large-scale investment projects.

Regulations that hinder the entry and growth of new technologies and new industries will be lifted drastically, Moon said.

The Federation of Korean Industries, which represents large businesses, said it expects tangible economic achievements through deregulation and innovative growth.

South Korea's economy is predicted to have suffered its weakest annual growth in a decade last year, hit by a lengthy U.S.-China trade war and a cyclical slump in the memory chip sector.

The economy is expected to grow 2.4 percent this year, following last year's estimated 2 percent expansion, on the back of an anticipated recovery in the memory chip sector and a series of policy measures.

South Korea's exports fell 10.3 percent on-year in 2019 to $542.4 billion, according to government data.

For December last year, the monthly exports slipped 5.2 percent on-year to $45.7 billion to extend their slump to a whopping 13th consecutive month.

But this year's outbound shipments are forecast to rise 3 percent.

Citizens watch a live TV broadcast of President Moon Jae-in's New Year's address at Seoul Station in the South Korean capital on Jan. 7, 2020. (Yonhap)

On the property market, Moon again vowed to stabilize home prices in Seoul and its neighboring areas.

"(We) will never be defeated in the war against real estate speculation," Moon said.

Last month, the government unveiled tougher measures to rein in a rise in housing prices.

Under the measures, mortgage loans have been banned when buying a house worth over 1.5 billion won in Seoul and other areas since mid-December last year.

The loan-to-value ratio for the purchase of a home valued from 900 million won to 1.5 billion won will be cut to 20 percent from the current 40 percent.

Moon also unveiled a plan to push for the revision of laws to foster a "fair economy" and the encouragement of "sound management" by local conglomerates.

Since his inauguration, Moon has worked to resolve the issue of large business groups' cross-shareholdings and rectify unfair trade practices by big firms.


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