President Lee Myung-bak said Monday that his economic policies will focus on strong economic growth, job creation and a firmer middle class.
“This year, our goals in running the economy are: a high economic growth rate of over 5 percent, inflation of under 3 percent, the creation of good jobs and improvement in quality of life of middle- and low-income families,” Lee said in his New Year’s address.
While stating the country’s performance of 2010 as “exemplary in overcoming the economic crisis,” Lee said it is important to sustain the momentum by promoting the shared growth between conglomerates and small and medium-sized enterprises.
Lee also pledged a renewed commitment on investment for science and technology, vowing to increase Seoul’s investment in research and development works.
“The economy needs to continue its robust path this year. Without sustained economic growth and competitive industries, it is impossible to create jobs, expand welfare or strengthen fiscal stability,” Lee said.
Major research houses are more conservative on growth outlook due to spiking oil and commodity prices abroad and weakening exports. The Samsung Economic Research Institute projected 3.8 percent and Hyundai Research Institute and LG Economic Research Institute both proposed 4 percent.
Seoul’s projection is also above the Bank of Korea’s latest projection of 4.5 percent and the United Nations Economic and Social Commission for Asia and the Pacific’s 4.2 percent. Analysts said the continued growth in domestic consumption should help the country derive more growth from the private sector. However, concerns center around rising commodity prices abroad which would challenge Seoul’s control of inflation while keeping up to its strong growth forecast.
The government, retaining the highest forecast for the GDP output for this year, recognized that those numbers could turn out to be more positive or negative depending on market conditions here and abroad. Finance Minister Yoon Jeung-hyun said Seoul will keep its macroeconomic policy “flexible” and work hard to stabilize prices.
“Against current economic conditions at home and abroad, we are required to carry out our macroeconomic policies in a flexible manner by taking inflation into account,” Yoon said in his New Year speech Monday.
Lee also affirmed Seoul’s support for green growth industries and more free trade agreement.
“In the future, the solar power industry will be nurtured as the semiconductor industry was, and the wind power industry as shipbuilding was,” Lee said.
With regards to FTA, he said Seoul will carefully but with speed work on FTA negotiations with China and Japan. Since Lee took office, Seoul has concluded FTAs with India, the EU and other countries constituting two-thirds of the entire world market.
By Cynthia J. Kim (firstname.lastname@example.org)