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S. Korea to announce new gov't economic policy plans next week

Economy 15:03 June 09, 2022

SEJONG, June 9 (Yonhap) -- South Korea's finance ministry said Thursday it will unveil the Yoon Suk-yeol government's economic policy plans next week as the country faces heightened economic uncertainty.

The government plans to roll out the blue print for the new government's economic policy next Thursday, with a focus on revitalizing the private sector and seeking deregulation.

President Yoon has pledged to pursue small government in a bid to help the private sector take the initiative in creating jobs and spurring economic growth.

This file photo, taken May 23, 2022, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

Asia's fourth-largest economy faces growing inflationary pressure due to soaring fuel costs caused by Russia's war with Ukraine and the economic recovery.

The Organization for Economic Cooperation and Development (OECD) on Wednesday sharply raised its 2022 inflation outlook for South Korea to a 24-year high of 4.8 percent from its earlier estimate of 2.1 percent.

The Paris-based organization also cut its 2022 growth outlook for the South Korean economy to 2.7 percent from 3 percent.

The new economic policy is also expected to contain reform measures in key five segments -- the public sector, labor, education, finance and services -- as the government aims to prevent the country's potential growth rate from falling to zero percent.

The potential growth rate refers to the maximum possible growth rate at which an economy can grow without triggering inflation.

South Korea's potential growth rate is estimated to fall to 2 percent in 2021-2022, sharply down from around 5 percent in the early 2000s.

The OECD forecast South Korea's potential growth rate could dip to 1.3 percent in 2030 and further fall to 0.9 percent in 2033.

sooyeon@yna.co.kr
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