Economic experts appeared to be optimistic about the government’s latest policy initiatives, according to a survey conducted by the Federation of Korean Industries earlier this month.
More than half of the 37 experts surveyed by the FKI said that they supported the economic direction taken by Finance Minister Choi Kyung-hwan. The respondents included the chiefs of state-run or leading private economic institutes, university professors and financial analysts.
Another 75.7 percent of the experts predicted that the domestic economy, which suffered severe blows to consumption in the aftermath of the sinking of the Sewol ferry in April this year, would recover if the policies laid out by Choi were properly implemented.
The economic growth rate that they projected was 3.6 percent for this year and 3.9 percent for next year. The figures were close to the government forecasts of 3.7 percent and 4 percent.
Last month, Choi announced a set of new stimulus packages involving policies for increasing the government’s tax revenues, boosting the sluggish property market and spurring consumption.
As priority goals for the government’s economic policies, the experts cited economic innovation (48.7 percent) and domestic market revitalization (43.2 percent).
For this, they urged the government to focus on deregulation and policies for bolstering the financial sector.
But the respondents, despite their appraisal of Choi’s new stimulus policies, also pointed out that the economy could sink into a long-term depression if it is unable to overcome the negative impact of the Sewol accident.
Among the respondents, 51.4 percent said that the nation’s economy could follow the precedent of Japan and sink into a low-growth phase. Another 45.9 percent said that the economy appears to be on an uptrend but has lost its growth momentum.
More than two-thirds of the experts called on the Bank of Korea to continue cutting the key interest rate.
Last Thursday, the Bank of Korea lowered the key policy rate 0.25 percentage point to 2.25 percent, which was the lowest in 46 months, in a move to boost consumption.
By Bae Hyun-jung (firstname.lastname@example.org)