South Korea’s Finance Minister Yoo Il-ho said Wednesday the government will devise a new set of economic policies to counter growing uncertainties and difficulties stemming from debt restructuring and decreasing number of jobs in the latter half of this year.

In an economic-related ministerial meeting on Wednesday, Minister Yoo said the government needs to prepare for the worst through policy measures as the economy is expected to further deteriorate later this year.


“The economy has recently shown improvement in consumption and production since last March, but the conditions are likely to worsen as the country launches corporate restructuring and ends the period of special excise tax cuts in the second half of this year,” Yoo said.

“As the restructuring (of shipbuilding and shipping companies) commences, concerns over the job market will grow. We must acknowledge this crisis facing the country and actively take action through policy measures.”

Yoo added that manufacturing jobs will continue to take a hit by the restructuring, and the young will suffer the most, noting that the manufacturing industry has employed less than the threshold of 100,000 over the last two months.

Manufacturers only employed 50,000 people in May, and 48,000 in April, according to the Finance Ministry.

Yoo continued to say the economy should reform with a focus on creating jobs by rapidly restructuring conventional manufacturers saddled with high debts.

“We must not stop here, but systematically boost the services industry in order to create quality jobs. To this end, the government will introduce a road map for the services industry early next month,” the finance minister said.

In addition to rising internal risks, Asia’s fourth-largest economy remains vulnerable to external risks stemming from a possible rate rise in the U.S. and U.K.’s exit from the European Union, or “Brexit.” Britain will vote whether to leave or remain in the Union this Thursday. Also, a continued slowdown in China, Korea’s biggest trading partner, will further weigh down Korea’s economy.

“A (possible) rate rise in the U.S. and financial instability in China are likely to fuel economic uncertainties in the latter half of this year,” Yoo said.

“We need to preemptively counter and manage both internal and external risks.”

The economic-related meeting followed an emergency meeting of ministers presided over by Prime Minister Hwang Kyo-ahn to review the government’s plan on the expansion of Busan’s Gimhae International Airport.

By Park Hyong-ki (hkp@heraldcorp.com)