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Park-economy

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(Globalpost/GlobalPost)

SEOUL, March 28 (Yonhap) -- President Park Geun-hye said Thursday the government should put its immediate economic policy focus on bringing vitality back to the slumping economy with "more active" stimulus measures and steps to normalize the real estate market and stabilize prices.

Park made the remarks in a meeting with top economic policymakers, just as the government sharply lowered its growth outlook for this year to 2.3 percent from the previous 3 percent forecast due to toughened market conditions at home and abroad.

"First of all, we have to concentrate our capabilities on straightening out wrinkles in the economy for ordinary people," Park said. "Through more active economic measures, we have to vitalize economic conditions and respond swiftly to pressing livelihood-related issues, such as normalizing the real estate market and stabilizing everyday prices."

She also called for pre-emptive measures for household debts and other risk factors.

Government officials say the economy is in a worse situation than expected.

The country's gross domestic product grew less than 1 percent on-quarter for the seventh straight quarter, which is the longest streak of such low growth rates. The economy grew 2 percent in 2012, the slowest gain in three years.

Exports, investment and consumption all remain weak.

Exports, the main engine for South Korea's growth, dropped 8.6 percent on-year in February, a turnaround from the previous month's double-digit growth. In January, the country's industrial output also contracted for the first time in five months.

Businesses remain reluctant to hire and invest amid prolonged uncertainty over market and policy directions of the government. Facility investment plunged 13.6 percent on-year in January, marking the ninth straight month of contractions. Retail sales also dropped 2 percent last month from a month earlier.

The economy's slower than expected recovery is expected to lead to a fall in government tax revenues by about 6 trillion won (US$5.39 billion), compared with the previous estimate of revenues, officials said. That is a cause for concern for the new government at a time when it is struggling to raise money to finance Park's campaign projects.

"Raising financial resources is very important in carrying out key policy tasks," Park said. "Rather than trying to open the purses of the people, we have to first try to uncover new tax sources through measures to firmly establish tax justice, such as bringing the underground economy above ground."

Park also instructed economic policymakers to work more closely together, regardless of which agencies they belong to, in order to put together more effective economic policies.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130328/park-economy