Korea - economy faces structural headwinds: IMF: ARIRANG NEWS

ARIRANG NEWS

Published on Aug 13, 2016

IMF "한국, 구조적 '역풍' 대응해야••• 내년 3% 성장전망"
The International Monetary Fund expects the Korean economy to expand less than three percent this year due to various structural restraints.

However, it welcomes recent fiscal measures and monetary easing aimed at tackling the challenges hindering growth.

Kim Min-ji reports. 

The Korean economy faces a number of structural headwinds going forward.
In its annual assessment of Asia's fourth largest economy,... the IMF says it expects Korea to grow two-point-seven percent this year.

The agency says there are several structural constraints on the country, including a rapidly aging population, a heavy reliance on exports and lagging productivity.

However,... the growth outlook unchanged from its previous projection,... and the IMF also maintained its forecast for next year at three percent.

The IMF holds bilateral discussions with member countries every year to review their economic developments and fiscal policies.

The agency says it supports the Korean government's push for corporate restructuring in order to bolster the country's growth potential.

Korea's shipbuilding industry has been at the center of the restructuring drive -- amid an industry wide slump and a drastic decline in orders.

Major shipbuilders are already engaging in aggressive downsizing and tens of thousands of workers are expected to lose their jobs this year.

The government announced a stimulus package,... which includes a ten billion U.S. dollar budget supplement, in order to cushion the negative impact,... as well as support job creation.

The Bank of Korea also cut key rate to a record low of one-point-two-five percent in June to prop up the economy.

Down the line,... the IMF says a carefully targeted expansion of social expenditure could help reduce inequality in Korea,... as well as boost consumption and bolster productivity.

Kim Min-ji, Arirang News