[EDITORIALS]Politicking at the central bank

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[EDITORIALS]Politicking at the central bank

Park Seung, governor of the Bank of Korea, suddenly adopted an optimistic view of the nation’s economy yesterday. Domestic consumption and investment would begin to recover soon and the gross domestic product would grow by as much as 6 percent this year, he said. Why did Mr. Park abruptly express such a rosy view, only a week before the National Assembly elections?
Only a few days ago, Lee Hun-jai, the minister of finance and economy, made a political remark that mismanagement of the economy could not be a reason for impeachment. And he expressed the view that the economy would begin to improve in the second quarter. Now, the governor of the central bank has joined in those optimistic views, raising suspicion that the government is enthusiastic in supporting the ruling party in the elections.
Only a month ago, Mr. Park was pessimistic about the economic outlook. Yesterday, he said he had changed the view because exports and the global economy had unexpectedly improved. But in the last month, there have been no factors that would sharply change the outlook for the nation’s economy. In addition, two of every three companies say they have no plans to offer new jobs. So how did Mr. Park forecast that 550,000 new jobs would be created this year, not 370,000 as forecast earlier?
The atmosphere in our industries and consumers’ feelings about economic conditions are far different from Mr. Park’s rosy views. Consumer sentiment in March, as surveyed by the National Statistical Office, just fell to its worst level since last October. Although financial assets held by individuals increased in value to over 1 quadrillion won ($877 billion), domestic consumption is sluggish. Companies are reluctant to make capital investments despite their cash hoards.
The Federation of Korean Industries is worried about more labor disputes after the National Assembly elections. Companies and consumers are now confused, because the government is suddenly optimistic about the economy.
The head of the central bank should be independent from politics. Mr. Park should not have made such remarks, at least during this campaign period for the National Assembly elections.
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