Financial policymakers and authorities are on high alert as the government is expected to see a shortfall in tax revenue this year amid the economic slowdown.In a report to the Strategy and Finance Committee of the National Assembly on Sunday, the National Tax Service said that the shortfall would reach almost 10 trillion won ($8.9 billion) in the first half of this year, the biggest loss in four years since the global financial crisis.The report showed that the government has collected taxes wo

A series of fiscal stimulus and monetary policy unveiled and implemented by the government and the central bank are apparently moving in the opposite direction to their intentions of boosting the financial markets and the real economy.Market interest rates have increased although the Bank of Korea opted for a looser monetary policy last May to lend a hand to the government’s extra fiscal spending. Credit spreads between corporate and government bonds have further widened despite efforts by finan

President Park Geun-hye urged her economy-related ministers to zero in on drastically reforming Korea’s regulatory system to boost business confidence and investment amid an uncertain outlook for the global economy.In a trade and investment promotion meeting presided over by the president at Cheong Wa Dae on Thursday, Park also called on regional governments and offices to work with the central government and businesses to improve the country’s investment environment.“The key point (of regulator

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Wednesday that the government will consider expanding tax benefits and policy financing to small and medium businesses operating in the social services sector.In an economic-related meeting, Hyun said that the social services sector will contribute to job growth as demand for social services such as child care and nursing for senior citizens is expected to grow.Korea aims to introduce measures to boost the sector’s value addition by fu

The International Monetary Fund said Tuesday that it has revised down its global economic forecast to 3.1 percent this year and 3.8 percent next year.Both of these projections are a 0.2 percentage point cut from its initial estimations, the IMF said.The eurozone’s prolonged debt crisis, a slowdown in emerging economies and spending cuts in the U.S. were the reasons for the growth forecast revision, the IMF explained.The U.S., the world’s largest economy, is projected to grow 1.7 percent this yea

The Ministry of Strategy and Finance said Tuesday that government agencies requested a total of 364.7 trillion won for spending next year, up about 23 trillion won, or 6.6 percent, from this year.Higher budget demands come as government agencies seek to increase spending on welfare, social security and research and development, the Finance Ministry explained in a press statement.Government agencies allocated expenditures of 342 trillion won, including 98.4 trillion won from public funds, this ye

The Ministry of Strategy and Finance said Monday that it would overhaul its management and evaluation systems of state-run enterprises and institutions to boost their transparency and efficiency.It said that the government would strengthen its monitoring of state-owned enterprises to see whether they are efficiently managing their debt and human resources.This is part of efforts to wind down the debt that has adversely contributed to an overall increase in national obligations.Also, the governme

The government will reevaluate its initial plan of establishing regional national institutions and redraw it from scratch after thorough feasibility studies and reviews, the Ministry of Strategy and Finance said Monday.President Park Geun-hye pledged in her election campaign that her government would establish or relocate some national institutions to provinces to spur regional growth.Its initial proposal included building a national rehabilitation hospital in Ulsan, and a national aerospace tec

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Friday that the government vowed to make the investment environment “business-friendly” through a second set of deregulatory measures for foreign-invested companies in Korea.In a luncheon meeting with the American Chamber of Commerce in Korea, the finance minister said that improving Korea’s business environment was “critical” to ending its low growth and further attracting foreign investment.Korea would make efforts to do this by intr

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Thursday that the government would undo “any discriminative policies” against the services sector and provide the same support to the industry as it had to the manufacturing sector.This is part of efforts to boost productivity in the services industry and achieve a 70 percent national employment rate.Although the services sector has created more jobs than the manufacturing sector over the years, its productivity falls well behind the O

The National Assembly on Tuesday passed revised antitrust bills that scaled back the scope of rules and regulations governing business transactions between family-run conglomerates and their subsidiaries.This move comes after the private sector raised concerns that the government’s toughened stance against chaebol may adversely affect business confidence.Deputy Prime Minister and Finance Minister Hyun Oh-seok previously said that the government would refine some of its policies and regulations t

Korea’s Fair Trade Commission said on Monday that it imposed corrective measures against 20 deluxe hotels in Seoul for restricting their customers’ options for wedding floral decorations.The antitrust agency said that such premium luxury hotels forced their customers to buy and use either their in-house flowers or ones provided by their suppliers for wedding decoration.The measures included allowing consumers from now on to have wider choices such as purchasing other decorative products besides

Financial Services Commission chairman Shin Je-yoon said Monday that the Korea New Exchange will lay the foundation for the development of a “creative economy” in Korea where start-ups and small and medium enterprises can grow without the fear of financial failure.In a speech to celebrate the opening of the KONEX, the FSC chief said the new stock exchange will help form a new market paradigm that can lead anyone to come up with creative ideas and secure investments for business.The KONEX will fu

Start-up investors and entrepreneurs are expected to breathe a sigh of relief once the new stock market exclusively for venture tech firms and small and medium enterprises opens for trading on July 1, 2013.The so-called Korea New Exchange, or KONEX, offers a whole new opportunity for both institutional investors and innovators to raise and redeem capital needed for venture business in a shorter time period.This will also make venture entrepreneurs less dependent on bank loans, which significantl

Korea’s prolonged low growth has changed the consumption trend of alcohol beverages, with more consumers opting to drink inexpensive beer over premium spirits and wine.This pattern along with other variables, such as the hotter weather and the emerging issues of domestic beer lacking quality taste, have boosted sales of foreign beer to surpass those of wine for the first time over the last month.Also, the economic slowdown has further shrunk the domestic whiskey market, according to market data

The announcement of the U.S. Federal Reserve’s plan to scale back its monetary stimulus has sent interest rates on long-term state bonds around the world upward, indicating that the end of a low-interest era is nearing.Expectations that a tight monetary policy will follow the tapering of quantitative easing in the U.S. on the back of economic recovery have led investors worldwide to unload their fixed-income securities to avert further losing value on their bonds, analysts said.The basic scenari

Bank, IBKThe Industrial Bank of Korea has come up with a new and smart savings account product that offers lucrative deposit rates for any consumer seeking to further save and manage earnings.The state-run commercial bank said that the product, named “IBK Shaking Savings” in Korean, allows consumers to create an account through their smartphones by downloading an app.They can also do so through social networking or messenger platforms such as Facebook or Kakao Talk, and join a group created by o

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Tuesday that the government would retool and improve some of its regulations that may have eroded confidence and hindered business growth.Hyun met with leaders of Korea’s five business groups, including the Federation of Korean Industries, in a bid to ease concerns over the government’s push to tame unfair business practices and tax avoidance that may have increased tension in the industry.The minister of Trade, Industry and Energy and

Ever since Min Hyung-jong took office as the administrator of Korea’s Public Procurement Service last March, he has tried to be out in the field instead of behind his desk, meeting small and medium enterprises or suppliers.His efforts to get close to SMEs, to listen to their concerns and thoughts on ways to improve the supplier industry, has gained him the reputation of “someone you can really talk to.”As a procurement specialist for over 30 years, Min said it was important for him to visit as m

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Monday that the government was ready to implement countermeasures against increased capital-flow volatility stemming from the so-called Bernanke Shock.In a meeting with the ruling Saenuri Party, Hyun added that Korea’s economic fundamentals were still intact with a continued current account surplus and few short-term foreign borrowings that limited its exposure to an exit from quantitative easing.Shin Je-yoon, chairman of the Financial