South Korea yesterday announced a US$10.7 billion plan to stimulate economic growth in the face of a global slowdown.
The government, saying it expects a significant slowdown in exports, detailed plans to spend an extra 11 trillion won next year, plus tax cuts totaling 3 trillion won, to boost sagging domestic demand.
“The ongoing global financial turmoil originating from the US subprime mortgage credit crunch is causing concern over a global economic downturn,” Minister of Strategy and Finance Kang Man-soo told reporters.
PHOTO: AP
“Financial market uncertainties have been aggravated and are exerting a knock-on impact on the real economy,” he said, stressing the need for the package to stimulate Asia’s fourth largest economy.
The government, under fire for weeks over its perceived weak leadership amid the global crisis, announced a wide-ranging plan to stabilize the shaky won and to boost the economy.
The finance ministry, in a statement announcing the measures, said short-term prospects for a turnaround in the global turmoil appear dim.
“Against this background, the [South] Korean government proposes ... policy measures to cope with these unprecedented challenges by announcing pre-emptive, decisive and sufficient counter-measures,” it said.
Of the 11 trillion won in extra public spending proposed for next year, 4.l6 trillion won would be spent on social infrastructure such as schools, universities, hospitals and libraries. Another 3.4 trillion would be used to help small and medium-sized firms, farmers and fishermen. One trillion won would be used to help low-income households and 1.1 trillion to support local governments. In addition to government spending, public enterprises would also expand investment by 1 trillion won.
Next year’s original budget submitted to parliament this month was for 273.8 trillion won, including spending by state-run funds, based on an assumption of 5 percent growth next year.
But the ministry yesterday cut its growth forecast for next year to around 4 percent, while tipping growth of 4 percent to 4.5 percent this year.
It announced a series of steps to revitalize the sagging property market, warning that “a potential sharp drop in asset prices may undermine the financial health of [South] Korean financial institutions.”
These largely ease restrictions imposed in recent years to curb speculation when the property market was soaring. South Korea had been dogged by fears of a re-run of the 1997-1998 financial crisis, partly because its banks were more exposed than elsewhere in Asia to repayment of dollar-denominated loans.
Last month, the government announced state guarantees worth up to US$100 billion on foreign borrowing by local banks. It followed up last week with news of a currency swap arrangement worth US$30 billion with the US Federal Reserve.
The news sharply pushed up the stock market and the won, which had been Asia’s worst performing major currency this year.
The finance ministry said yesterday it would also try to expand bilateral swap arrangements with China and Japan.
It said it would increase the ceiling of the foreign exchange stabilization fund from the current 15 trillion won to 20.6 trillion won, equivalent to twice the average daily exchange trading volume.
Extra funds would go to promote exports, while efforts to reach free trade deals with the EU and India would be speeded up.
Authorities would try to avoid “extreme volatilities” in the foreign exchange market with smoothing operations. And Foreign currency bank deposits would enjoy the same level of guarantees as local currency deposits.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS