Seoul Official Rejects Fiscal Policies That Create Deficit

Korea's top economic policymaker said Monday that Seoul would not attempt to stimulate the economy through deficit spending, as it did in 1998 and 1999.

Speaking before a group of local academics, the deputy prime minister, Jin Nyum, said, "Rather than implementing new policies, the government will focus on monitoring whether regional governments follow the central government's economy-boosting measures, including spending budgets and funds ahead of schedule."

Mr. Jin was stating that the government would not propose an additional supplementary budget, said a Finance Ministry official.

Separately, Chon Chol-hwan, head of the Bank of Korea, said domestic corporations are shifting to the stock and bond markets to raise money.

"The central bank will cooperate with the government on the development of the direct financing market," he said.

Saying the country's restructuring drive can be maintained only if the economy continues to grow and inflation is curbed, Mr. Chon repeated his willingness to implement a "timely" monetary policy, a comment many analysts said was a hint at an additional rate cut.

by Chung Chul-geun