Extra Support for South Korean Economy Eyed by Finance NomineeCynthia Kim and Eunkyung Seo
South Korea Finance Minister nominee Hyun Oh Seok said Asia’s fourth-biggest economy needs a policy boost, speaking to lawmakers the day before a central bank monetary-policy meeting.
The nation needs “short-term policy support” to spur growth, Hyun, 62, head of the Korea Development Institute, said at a parliamentary confirmation hearing today. “We will consider various policy measures including fiscal and financial support as well as measures to spur the property market.”
Investors are assessing the likelihood of fiscal stimulus after President Park Geun Hye took office on Feb. 25 and as weakness in the yen aids export rivals in Japan. The central bank will leave interest rates unchanged tomorrow, according to the median forecast of analysts in a Bloomberg News survey.
“Fiscal stimulus is fast medicine,” said Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore, adding that a package of such measures would have a more immediate effect on the economy than a rate cut.
South Korea’s economy may grow in a 2 percent range this year, Hyun told the lawmakers, an estimate that compares with the 2.8 percent forecast of the Bank of Korea.
While Park doesn’t need lawmakers’ approval to appoint Hyun as finance minister, their support is needed for him to be named as deputy prime minister.
Hyun has a Ph.D. in economics from the University of Pennsylvania and worked for the World Bank and South Korea’s finance ministry before becoming head of a state-run research organization, according to his profile from the finance ministry.