South Korea’s growth target for 2012 remains achievable despite mounting downside risks triggered by persistent eurozone woes, the country’s top economic policymaker said Friday.
In a press conference, Finance Minister Bahk Jae-wan said the developments taking place in the European Union pose greater challenges, but data indicates there may not be any need to change Seoul’s 3.7 percent growth forecast for this year.
He stressed that the government is not considering artificial measures to bolster the economy because such steps could lead to negative fallouts.
The government’s target is higher than the 3.5 percent growth predicted by the Bank of Korea and the 3.3 percent forecast by the Paris-based Organization for Economic Cooperation and Development.
Bahk said a clearer picture on growth will emerge in one or two month after the EU outlines steps to resolve its outstanding concerns, including Greece’s debt problems.
The policymaker said the country is committed to achieving a balance between spending and revenue in 2013, and that goal should be possible even if ongoing plans to sell off the state’s holdings in public companies do not go according to plan.
“Every effort will be made to sell holdings, but there are other ways to achieve a balanced budget,” he said.
Speaking about exports, which play a major role in fueling growth, Bahk said he expected some improvement in May, mainly because the month had 0.5 more working days than a year earlier.
In March and April, outbound shipments of Asia’s fourth largest economy contracted compared to a year earlier.
The minister also said that, while consumer prices have fallen sharply in recent months compared to 2011, Seoul has not made a decision on raising electricity prices.
“There is a need to look carefully at the issue before a decision is made,” he stressed, without elaborating further.
On measures to bolster the local property market, which has been in a slump in recent years, the minister said there is a need to first see how the market reacts to an easing of restrictions announced on May 10.
