Korean Government Sticks to its Growth Forecast

South Korea’s Finance Ministry plans to stick with its growth forecast for this year, putting it at odds with the central bank on the outlook for Asia’s fourth-largest economy.

The government stands by its December projection for gross domestic product to expand 3.8 percent in 2015, Vice Finance Minister Joo Hyung Hwan said in an interview in Seoul. The differing views partly reflect a divergence of opinion on the likely impact of government policies, Joo said on Jan. 16, a day after the Bank of Korea cut its estimate to 3.4 percent.

“There are certain differences in terms of how these variables will affect consumption, investment and exports,” said Joo, 53, referring to support measures from the administration of President Park Geun Hye including fiscal stimulus and relaxed lending rules. The “basic tone” for the economy this year is improvement and recovery, he said.


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