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(2nd LD) Finance minister warns against excessive fear of new coronavirus

All News 17:04 February 12, 2020

(ATTN: ADDS finance minister's planned meeting with Bank of Korea chief in last 3 paras; RECASTS 2nd para)

SEOUL, Feb. 12 (Yonhap) -- South Korea's finance minister on Wednesday warned against excessive fear of the spread of a new coronavirus, urging people not to curb their normal economic activities.

Finance Minister Hong Nam-ki told a meeting with economy-related ministers that the economy is expected to feel the brunt of efforts to contain COVID-19, but most of the economic impact may come from "excessive fear and anxiety."

"As confirmed cases are under the government's prevention and control works, (the government) asks people to carry out normal economic and consumption activities," Hong said.

As planned, the government will push ahead with investments worth 100 trillion won (US$84.6 billion) this year to keep the economy's recovery momentum, Hong said.

Hong said the government will come up with additional measures in coming weeks to help local firms cushion the economic impact of the virus.

Finance Minister Hong Nam-ki speaks at a meeting with economy-related ministers in Seoul on Feb. 12, 2020. (Yonhap)

Such measures include policy tools to boost local tourism, exports and private consumption.

South Korea had 28 confirmed cases of the virus, which originated from China and killed more than 1,100 people, as of Monday.

Last week, the finance ministry said it will provide 2 trillion won in financial support to small merchants who are expected to be hurt by the spread of the virus.

It is difficult to gauge how broadly the virus will spread, but the little-known disease is expected to negatively affect the Korean economy, analysts said.

The country's jobless rate fell to 4.1 percent in January and 568,000 jobs were created last month, marking the strongest monthly gain in more than five years.

Hong voiced concerns that the economic impact of the virus may negatively affect job growth. But the government will spare no efforts to minimize the economic fallout of the virus and help the private sector create more jobs, Hong said.

Hong is scheduled to hold a meeting with Bank of Korea Gov. Lee Ju-yeol on Friday to discuss how to cope with the economic impact of the virus.

It will be the first time the two men have met since August last year, when they discussed measures to deal with Japan's export curbs of key materials targeting South Korea.

The market is increasingly betting that the central bank will cut its key rate at its policy meeting on Feb. 27 to preemptively cope with the economic fallout of the virus.


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