Gov"t & IMF to Agree on Boosting Economy

The Korean government and the IMF (International Monetary Fund) are expected to agree on the urgency for the Korean government to boost the economy.
The Ministry of Finance and Economy (MOFE) announced on September 20 that it would completely revise various macroeconomic targets including money supply and governmental expenditures with the IMF at the fourth quarter policy consultation meeting in mid-October.
At this consultation meeting, the IMF is expected to suggest tax-reduction policies for stimulating consumer demand. At the previous third quarter meeting, the IMF had recommended lowering the value added tax (VAT) rate by 2~3% points from the current 10%.
MOFE intends to consult with the IMF about increasing the basic money supply for the fourth quarter by as much as 1~2 trillion won, more than the 25.64 trillion won both sides agreed upon at the third quarter meeting.
Both sides are also expected to agree that the Korean government should be able to expand governmental expenditures additionally if the economy worsens more than expected.
Accordingly, the budget deficit will reach 21.5 trillion won, 4.8% of the GDP (Gross Domestic Product).
Meanwhile, the government is willing to lower the year's growth rate target to minus 6 % which is 2% points lower than the target decided at the 3rd quarter meeting. Korea's economy is shrinking sharply, recording a minus 6.6% (GDP) growth rate during the 2nd quarter.
Regarding 1999, the government is targeting a 2% growth rate while the IMF figures on no growth rate.