Gov"t to Bolster Economy

The government is frantically attempting to stimulate the economy. It reasons that it is necessary to bolster the economy as soon as possible before Korea falls into a deep recession.
The government decided to spend 2.8 trillion won in public money within the month for social overhead capital (SOC) investment to create employment and to revitalize the construction business. The government intends to continue making efforts to pull interest rates down.
The Ministry of Finance and Economy (MOFE) announced on September 15 that it will do its best to boost the economy by increasing the fiscal deficit.
Earlier, Hubert Neiss, Director of Asia-Pacific Department for the IMF, said on September 14 in the Asian Press Forum, organized by the Joongang Ilbo, 'Now it is necessary for the Korean government to boost the economy even though the fiscal deficit will increase more.'
MOFE announced that necessary public money will be mobilized by as much as 1.2 trillion won of central government's budget and 1.6 trillion won of local government's and as a result of these expenditures, 500,000 jobs would be created.
MOFE also announced that it would increase money supply by as much as 6 trillion won during the month to pull down interest rates. The government plans to solve the credit crunch of financial institutions and to raise the BIS capital adequacy ratio of major banks up to more than 10% by supporting the banks with public money.
The government,however, does not intend to lower the level of various taxes in order not to increase fiscal deficits to a dangerous level.