Gov`t to keep expansionary stance for economic recovery: minister

SEOUL, May 13 (Yonhap) -- South Korea's economic downturn is showing signs of
abating but it is premature to say it has bottomed out, the nation's top economic
policymaker said Wednesday, pledging the government will maintain an expansionary
macroeconomic policy stance until a full recovery is made.
"We should wait to see further if the economy has really bottomed out," Finance
Minister Yoon Jeung-hyun told a forum in Seoul. "The sharp economic downturn has
been easing and its pace is also slowing down but a downside trend is still under
way.
"Until the private sector shows sings of rebounding on its own, we will have to
keep an expansionary macroeconomic policy stance. We need fiscal spending to play
an active role at a time when the impact of monetary policies, including interest
rate adjustments, remains uncertain."
His comments come amid growing expectations that the Korean economy, Asia's
fourth-largest, may be gaining momentum for a turnaround from what threatened to
be the worst downturn in more than a decade.
Industrial output is rebounding and a decline in exports is easing, according to
recent government data. Stock and currency markets are also rising after
suffering sharp fluctuations last year.
Yoon has remained cautions over falling into premature optimism, however, citing
sluggish domestic demand and tightened labor markets in particular, where job
reductions are accelerating. In March, the nation's jobless rate rose to 4
percent with around 950,000 jobs being slashed.
He earlier predicted that the number of people out of work has likely exceeded
the 1-million mark.
"Labor market conditions are seriously deteriorating across the board," Yoon
said. "Jobless data to be released today will likely show that the number of
employed people declined further."
The minister noted the government's top priority in the second half is to create
jobs and stabilize the livelihood of those most vulnerable to the ongoing
economic slump by implementing the 28.4 trillion won extra budget endorsed by
lawmakers last month.
kokobj@yna.co.kr
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