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National Economic Advisory Council Proposes Economic Restructuring and Deregulation
Presidential Suggestions
National Economic Advisory Council Proposes Economic Restructuring and Deregulation
  • By Jung Suk-yee
  • October 8, 2015, 01:15
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A photo of the previous 6th National Economic Advisory Council meeting on Dec. 22, 2014.
A photo of the previous 6th National Economic Advisory Council meeting on Dec. 22, 2014.

 

The National Economic Advisory Council held its sixth meeting for this year on Oct. 7. There, it mentioned the possibility of an interest rate hike by the Fed and unstable Chinese economic conditions as two of the largest external threats that the Korean economy is facing, and suggested economic restructuring and flexible fiscal policy to President Park Geun-hye, along with no-regulation zones for the revitalization of the regional economy.

“The interest rate hike is expected to have a limited impact on the domestic real economy, but things are different when it comes to the financial market,” it said, continuing, “In this context, the Korean government needs to adjust the foreign exchange rate in a flexible way, while keeping control of household debts and forex risks and accelerating the reform of insolvent companies.”

It added that concerns over a hard landing of the Chinese economy are likely to pose a significant risk to the Korean economy in the short term. According to the council, Korea’s GDP decreases by 0.21 percent every time China’s GDP falls 1 percent. In this regard, the council advised industrial structural reforms for a higher level of competitiveness.

Concerning regulations to be repealed or relaxed, it picked the ban on the construction of production facilities in medical industrial complexes, floor areas, and building-to-land ratio restraints applied to specialized industrial complexes and environmental impact assessment regarding urban industrial districts.