South Korea's government will continue its stimulus spending until the export-dominated economy recovers fully from the global downturn, Finance Minister Yoon Jeung-Hyun said Wednesday. "We should wait to see further if the (local) economy has really bottomed out," Yoon told a forum in Seoul.
"The sharp economic downturn has been easing and its pace is also slowing down but a downside trend is still under way. "Until the private sector shows signs of rebounding on its own, we will have to keep an expansionary macroeconomic policy stance," Yonhap news agency quoted him as saying. On Tuesday the central bank froze its key interest rate at a record low of two percent for the third straight month, saying the economic decline has clearly eased.
But its governor Lee Seong-Tae also cautioned against premature optimism. Yoon said fiscal spending must play an active role at a time when the impact of monetary policies, including interest rate adjustments, remains uncertain. The government in March unveiled a 28.9-trillion-won (21.3-billion-dollar) extra budget, complementing additional spending announced earlier.
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