Finance minister eyes tougher hardships in 2009

SEOUL, Dec. 31 (Yonhap) -- South Korea will face a more challenging year in 2009
with deepening concerns that a global recession could make it tougher for the
export-driven Asian economy to maintain economic growth, a top economic
policymaker said Wednesday.

"Economic conditions will get worse next year as the global financial turmoil
continues to take its toll, causing both advanced and emerging economies to fast
lapse into a recession," Finance Minister Kang Man-soo said in his New Year
message. "We are currently faced with tough situations that we have never
experienced nor imagined."
"Our economy is under strain from weak domestic demand and sharply-slumping
export growth, which has been propping up our economy. It seems it will be tough
to keep the economy growing until the first half of next year," he added.
His remarks on growth forecast are in line with many experts, some of who are
forecasting that the South Korean economy might contract next year for the first
time in 10 years. Last week, President Lee Myung-Bak said the economy may shrink
in the first half from an estimated 3.7 percent advance for this year.
Kang, however, emphasized that the current crisis could turn into an
"opportunity" and that the government will join global economic-boosting efforts
including "restructuring" in the corporate sector and creating more jobs.
He also pledged that the government will strive to provide more liquidity to
stabilize the nation's financial system, while frontloading fiscal spending to
bolster rapidly slumping domestic demand.
"The government should keep providing necessary liquidity to the financial and
currency markets and lower market interest rates to reduce the borrowing burden
on companies and households. It also has to frontload its planned fiscal spending
in the first half as much as possible," he said.
kokobj@yna.co.kr
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