By Lee Hyo-sik
Staff Reporter
The nation cannot afford to be complacent about the state of its economy just because of several upbeat economic indices in recent weeks, Strategy and Finance Minister Yoon Jeung-hyun said Wednesday. He stressed that the Korean economy still has a long way to go before a genuine rebound.
At an economy-related ministers' meeting, Korea's top economic policymaker said the pace of the economic downturn here has slowed but the world's 13th largest economy will likely continue to head south for the foreseeable future.
``There have been several encouraging indicators pointing to an improvement in the overall economic conditions. But there are no concrete signals that we are heading toward a full-scale recovery. We should remain cool-headed and closely watch what happens at home and abroad,'' Yoon said.
On the same day, the Bank of Korea (BOK) announced that the nation's current account surplus reached $6.65 billion in March, the largest since the central bank began compiling relevant data. The record high surplus was possible, with exports declining at a slower pace than imports. Overseas shipments fell 17.8 percent year-on-year last month and imports plunged 35.8 percent.
Additionally, the bank reported last week that gross domestic product grew 0.1 percent in the first quarter of the year from the previous quarter, boosted by the government's fiscal spending and a slower decrease in exports, signaling that the pace of the economic downturn has eased. During the final quarter of 2008, output plunged 5.1 percent from the preceding quarter.
But the minister said exports have not fully recovered and it will take a long time for corporate investment and private consumption to pick up, with the job market remaining depressed. ``Additionally, the United States and other major trading partners have shown no signs of an improvement, which will continue to dampen Korea's outbound shipments.''
Yoon then said it was critical for the government to spend a 28.9 trillion won supplementary budget as soon as possible to help jumpstart the sagging economy, adding it will create jobs, upgrade the social safety net and stabilize the livelihood of low-income families.
``With the ongoing global economic downturn, we realized that the nation's export-oriented and manufacturing-centered economic structure is not enough to propel us into the league of the advanced economies. We must foster knowledge-based and high value-added services industries as new growth engines, boosting the size of our domestic market,'' the minister stressed.
Yoon said the government will ease regulations on the medical, educational and other services sectors, as well as provide tax breaks and other support. ``Government officials should not be obsessed with short-term achievements. To nurture a globally competitive services industry here, we should take a step-by-step approach on a long-term basis.''