New Economic Team

Choi Kyung-hwan, candidate for Deputy Prime Minister for Economic Affairs and Minister of Strategy and Finance.
Choi Kyung-hwan, candidate for Deputy Prime Minister for Economic Affairs and Minister of Strategy and Finance.

 

The Park Geun-hye administration is expected to focus on growth in its economic policy operation from now on, to address problems such as unemployment and a decrease in economic vitality. The new economic department of the current government has recently suggested the goal of continuing 6 percent annual growth through economic reform, improving the national market economy system and beefing up the national economic fundamentals. 

This is a policy direction similar to what the previous governments, both conservative and progressive, showed through their second economic department reshuffling, in order to prevent lame ducks. There is some difference though, in that the government is seeking voluntary participation by economic agents through deregulation based on market principles instead of intervention. This has to do with the large amount of national debt, too. 

Under the circumstances, aggressive measures for boosting domestic consumption and investment are likely to come first in line. The economic policy packages for the second half of this year are slated to be available early next month. 

The short-term economic stimulus measures include deregulation in the housing market. Deputy Prime Minister for Economic Affairs and Minister of Strategy and Finance candidate Choi Kyung-hwan announced two months ago that borrowing regulations relating to LTV and DTI should be eased to some extent for the revitalization of the real estate market. 

Earlier, he had concentrated on legislations for the invigoration of the service industry through deregulation as well. The candidate is expected to focus on bills associated with for-profit medical services. 

Also expected are the structural reform of state-run enterprises and specific action plans for the revitalization of the creative economy, which constitute a part of the national three-year plan for economic innovation. 

Still, the government is unlikely to resort to intervention for economic stimulation such as that in the foreign exchange market as short-term market intervention has resulted in bubbles in many cases so far. Instead, it is going to concentrate on fundamental, domestic consumption-oriented reform for the enhancement of the potential growth rate.

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