Finance Minister Yoo Il-ho has expressed a strong will to overcome the nation’s economic crisis by bolstering the government’s fiscal roles.
In the economic-related ministers’ meeting on Wednesday, which was the 21st of its kind held since the inauguration of the Park Geun-hye administration in 2013, Yoo said he will pursue more proactive fiscal policies to facilitate an economic recovery.
Yoo assured that the government is doing its best to minimize the administrative vacuum left by the parliamentary passage of the impeachment motion against President Park by swiftly putting in place an emergency intra-ministerial economic response system.
He also urged the public and local companies to continue their economic activities as usual regardless of political uncertainties, and even asked them to consider increasing their investment.
During a meeting with reporters after the ministers’ meeting, Yoo said the government’s active fiscal role will help revitalize the economy, adding the government has a well-drafted plan to frontload the budget next year. He said the government will execute some of the budget quickly in the first half of the year.
Yoo had been preparing to leave office after Park nominated Financial Services Commission(FSC) Chairman Yim Jong-yong to succeed him last month.
However, on Monday Prime Minister Hwang Kyo-ahn, who now serves as Acting President in the absence of President Park, decided to retain Yoo as Deputy Prime Minister for economic affairs.
http://world.kbs.co.kr/english/news/news_hotissue_detail.htm?No=10064172
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In a report released on Tuesday, however, Moody’s Investors Service warned that the leadership vacuum will have a negative impact on South Korea’s sovereign credit rating, saying the country will not be capable of implementing new economic policies until its political crisis becomes stabilized.
The global credit appraiser also warned of a further downward revision of South Korean economic growth for next year. The rating agency previously predicted the South Korean economy will grow two-point-seven percent this year, two-point-five percent next year and two percent in 2018.
Moody’s, however, ended the report on a positive note, saying South Korea will be able to overcome its crisis with its institutional and fiscal fundamentals. Moody’s is maintaining South Korea’s rating at Aa2, the third highest rating in its sovereign rating system.
Another global ratings agency Standard and Poor's said Monday that the impeachment of President Park won't impact South Korea's credit rating. S&P's current rating for South Korea is AA.
The US key interest hike and its effects on the Korean economy
>Too much worrying could cloud one’s judgment. The fact is, Korea’s current account is in the black, and the country’s finances are solid.
http://world.kbs.co.kr/english/program/program_economyplus_detail.htm?no=5841
>As bonds sell off, South Korea gets buffers ready
Morgan Stanley analysts say Korea's low real yields and high dollar debt are risks. They estimate corporate debt denominated in U.S. dollars is about 32 percent of GDP, higher than in other large emerging markets such as Turkey, Russia or Brazil.
"There is not one thing in our economy that is not serious," Bank of Korea Governor Lee Ju-yeol said on Friday. "I believe the focus should be placed on stabilising financial markets and exchange rates and when needed, aggressive responses should be taken."
http://www.reuters.com/article/korea-markets-fund-idUSL4N1EB2WI
>J.P. Morgan Struggles in South Korea
http://www.businesskorea.co.kr/english/news/money/16596-unfitting-its-fame-jp-morgan-struggles-south-korea
>Korean economy faces 'storm' of U.S. rate hike
http://english.donga.com/Home/3/all/26/804036/1
>South Korea central bank: market impact of impeachment vote seems limited
"There seems to be limited impact," the Bank of Korea said in a statement after a meeting to review policy measures to contain any fallout from Friday's impeachment vote. The bank's Governor Lee Ju-yeol asked his officials to closely monitor the ...
http://www.reuters.com/article/us-southkorea-economy-cenbank-idUSKBN13Z02H