S. Korea to support consumption and investments to reach 2019 economic growth target
- 5 years ago
수출•투자 총력•••정부는 2.5% 경제성장률을 도달할 수 있나
As alarm bells continue to ring for the local economy, policymakers are scrambling to find ways to turn the economy around.
They're using everything at their disposal, but some experts are skeptical.
Our Kim Da-mi explains.
To cope with falling exports, the government will provide state financing measures... worth around six-point-four billion US dollars in the second half of this year.
Experts note however,... that of those measures,... the roughly 6 billion dollars earmarked for the semiconductor and bio-health industries... will provide some relief, albeit on a temporary basis.
"South Korea's exports depend on global economic recovery and Korea increasing its export competitiveness. The state financing measures will relieve the burden on local firms partially and temporarily, but the businesses themselves need to formulate their own approach to become more competitive."
In addition, the government aims to encourage active capital investment by local firms,... by providing tax breaks and other incentives.
But, many experts are pessimistic about their efficacy,... saying that these plans are not exactly new.
"For the last 10 to 15 years or so, investment seems to follow demand. We've tried a lot of incentives and interest rate is almost the lowest rate in ROK's history, but investment still hasn't picked up. I'm sure they'll be helpful to some extent, but given on our past experience, none of them are enough to overcome the low demand we're seeing."
Despite the government slashing South Korea's growth forecast to 2-point-5 percent for this year,... the country might still fall short of its new growth target... even with the lower bar.
"Partially it's government's job to cheerlead. That is, if they announce a number that is too low, then it will further depress the economy. So they want to estimate on the realistic side, but on the higher end of the realistic side."
Experts say the government should zero in on boosting consumption... to remedy Korea's ailing economy.
Given the unpredictable nature of external conditions,... South Korea should focus on what it can control... by encouraging consumption which could have a knock-on effect of stimulating investment as well.
KIM Da-mi, Arirang News.
As alarm bells continue to ring for the local economy, policymakers are scrambling to find ways to turn the economy around.
They're using everything at their disposal, but some experts are skeptical.
Our Kim Da-mi explains.
To cope with falling exports, the government will provide state financing measures... worth around six-point-four billion US dollars in the second half of this year.
Experts note however,... that of those measures,... the roughly 6 billion dollars earmarked for the semiconductor and bio-health industries... will provide some relief, albeit on a temporary basis.
"South Korea's exports depend on global economic recovery and Korea increasing its export competitiveness. The state financing measures will relieve the burden on local firms partially and temporarily, but the businesses themselves need to formulate their own approach to become more competitive."
In addition, the government aims to encourage active capital investment by local firms,... by providing tax breaks and other incentives.
But, many experts are pessimistic about their efficacy,... saying that these plans are not exactly new.
"For the last 10 to 15 years or so, investment seems to follow demand. We've tried a lot of incentives and interest rate is almost the lowest rate in ROK's history, but investment still hasn't picked up. I'm sure they'll be helpful to some extent, but given on our past experience, none of them are enough to overcome the low demand we're seeing."
Despite the government slashing South Korea's growth forecast to 2-point-5 percent for this year,... the country might still fall short of its new growth target... even with the lower bar.
"Partially it's government's job to cheerlead. That is, if they announce a number that is too low, then it will further depress the economy. So they want to estimate on the realistic side, but on the higher end of the realistic side."
Experts say the government should zero in on boosting consumption... to remedy Korea's ailing economy.
Given the unpredictable nature of external conditions,... South Korea should focus on what it can control... by encouraging consumption which could have a knock-on effect of stimulating investment as well.
KIM Da-mi, Arirang News.