Deputy Prime Minister Choi Kyung Hwan hosted the 38th Ministerial Meeting on the Economy on December 19 and discussed the following topics:
- Current economic conditions
- 2015 Economic Policy Directions
The following is a summary of the keynote speech delivered by the Deputy Prime Minister at the meeting:
Current Economic Conditions
President Park’s new economic team has been working hard to change poor consumer confidence and to help Korea break free from its current unsustainable trend of low growth ？ low inflation ？ excessive current account surpluses. Thanks to these efforts, the growth rate recovered in the 3rd quarter from the downturn due to the Sewol Ferry disaster, and the housing market recovery is building momentum as well with housing prices continuing to grow (0.4% in Q3 and 0.2% in October and November) and housing transactions, which rebounded in the 3rd quarter, have continued to be strong in October and November as well (up 68% in Q3, and up 14% in October and November).
Despite recent improvements, the recovery has yet to take root due to external risk factors and uncertainties and internal structural weaknesses. The global economy is improving, led by the US, but downside risks persist. Recovery momentum in Korea remains weak and despite the fall in oil prices contributing to economic growth both at home and abroad, Korea needs to be wary of growing global financial volatility owing to worsening economic conditions in Russia and other oil-producing countries.
The international community is proposing across-the-board structural reform as a solution to the ‘new normal’ of low growth and low inflation that is holding the global economy back, and Korea was recently praised for its own reform efforts as the Three-year Plan for Economic Innovation was forecast to grow the Korean economy by 4.4%p in the middle-to-long-term by the G20.
2015 Economic Policy Directions
Next year’s economic policies will focus on reforming Korea’s core sectors and improving Korea’s economic fundamentals. As part of this strategy, the government will:
- Boost public sector efficiency
- Boost financial sector dynamism
- Increase the number of high-quality jobs
- Boost corporate competitiveness
- Foster education programs that teach the skills demanded by industry
- Boost domestic demand (consumption and investment)
- Work together with concerned parties to implement win-win labor reform
The 2015 Economic Policies will be made fully available on December 22.