|President Park Geun-hye speaks at a meeting of economic policymakers at Sejong Government Complex in Sejong City on Friday. (Yonhap News)|
Senior government officials painted a rosy picture on gross domestic product growth for 2014 in the administration’s economic policy direction revealed on Friday.
“Economic growth will reach 3.9 percent on a year-on-year basis, outperforming the world’s overall GDP growth for the first time in four years,” the Finance Ministry said in a statement.
The International Monetary Fund has predicted that the global economy will expand 3.6 percent next year.
The forecast of 3.9 percent also surpasses Korea’s GDP growth rate of 3.8 percent (estimate) in 2013, 2.0 percent in 2012 and 3.6 percent in 2011.
The ministry said it would stimulate the economy via larger fiscal expansion during the first half of 2014, adding that the latter-half growth will be fueled by the projected recovery in the international economy.
For the employment sector, the ministry predicted that the number of newly hired jobseekers will increase to 450,000 in 2014, compared with 380,000 a year before.
The government showed strong commitment to active job creation by implementing detailed polices for the current road map to attain a national employment rate of 70 percent.
While the 2013 direction was aimed at improving macro-economic indices, the 2014 direction is designed to spread the positive sentiment to the private sector for active domestic demand, said the Finance Ministry.
Earlier in the day, President Park Geun-hye instructed the economic ministers to bolster the economy’s core fundamentals while she presided over a state officials’ meeting for the 2014 policy direction at the Sejong Government Complex. It is the first time that Park has visited the new administrative city in South Chungcheong Province since she took office early this year.
“It is projected that the country will set an all-time high in both exports and trade surplus,” she said. “By vitalizing it (factors for recovery) on a large scale, (the administration) should help ordinary people feel a favorable sentiment and strengthen the basic economic structure.” She also called on the government to promote drastic deregulation in finance, healthcare and other service sectors to enhance the nation‘s business environment to attract foreign investment.
At a news briefing after the economic ministers’ meeting, Deputy Prime Minister and Finance Minister Hyun Oh-seok reiterated that “a true recovery must be based on positive sentiment among the low- and middle income brackets.”
Meanwhile, policymakers promised to unveil diverse investment-boosting measures next year, a follow-up to a series of deregulation measures taken throughout this year to bolster corporate investment.
According to the Finance Ministry, deregulation and investment stimulus efforts will involve four major fields ― small companies, bio, pharmaceuticals and foreign investors.
The administration is also considering reinforcing the service sector. In January, it will announce measures to boost tourism, and in September, it will draw up a separate set of steps to enhance the competitiveness of the service sector.
In a bid to support these domestic demand-boosting measures and prop up the economic recovery, the government said that it will maintain its expansionary macroeconomic policy for the time being.
At least 50 percent of the state-led fiscal spending will be assigned in the first half to keep up the economic recovery mood by front-loading its budget, said the ministry.
By Kim Yon-se