March 13, 2019 12:46
The International Monetary Fund has advised Korea to carry out massive pump-priming to prop up its sagging economy.
An IMF mission made the recommendation in a press conference in Seoul on Tuesday after visiting major government agencies, the Bank of Korea, state-run economic think tanks and private businesses over the past two weeks.
Tarhan Feyzioglu, the head of the IMF mission to Korea, urged the government to "provide more fiscal stimulus through a supplementary budget" because it has the ammunition to do so thanks to increased tax revenues over the last three years.
Feyzioglu recommended a supplementary budget of more than 0.5 percent of GDP, which based on last year's figure would amount to around W9 trillion (US$1=W1,130). In that event, "the government's growth target of 2.6-2.7 percent is feasible this year," he added.
Feyzioglu also recommended that the BOK "should have a clearly accommodative monetary stance."
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